PFRDA Issues New Rules For NPS Account Closure: Who Would It Affect

The Pension Fund Regulatory and Development Authority (PFRDA) in a recent circular issued guidelines for Indian citizens who renounce Indian citizenship for their National Pension System (NPS) account. According to the circular, if an Indian renounces Indian citizenship and does not hold the Overseas Citizen of India (OCI) card, the NPS account of such accountholders should be closed.

The circular dated April 21, 2025, reads, “In respect of such subscribers who have validly renounced their Indian citizenship and do not hold an OCI card, the said subscriber is required to forthwith intimate National Pension System Trust (NPS Trust) of the change in status along-with proof thereof and PRAN/NPS account held by the subscriber shall be closed and the entire accumulated pension wealth may be transferred to Non-Resident Ordinary (NRO) account only, subject to process stipulated in the circular.”

Note that an NPS account can be opened by Indian citizens, including resident, non-resident, and overseas citizens of India. NPS offers different investment options and is a tool for long-term financial planning. Anyone within the age bracket of 18 to 70 years can be a part of it. The scheme comes with a mandatory 40 per cent annuity of the corpus.

What Should A Subscriber Renouncing Indian Citizenship Should Do?

Those who have given up their Indian citizenship and do not have OCI cards are required to:

• Inform NPS trust immediately through an undertaking that they have renounced their citizenship

• Submit an application to close their NPS account

• Submit the valid certificate of renunciation of Indian citizenship or cancelled Indian passport or surrender certificate

Once the documents are verified, the accumulated funds in the NPS will be transferred to the Non-resident account (NRO) of such person

The NPS Trust and Central Recordkeeping Agencies (CRAs) will be responsible for verifying the details, processing the request, and transferring the funds from NPS to the subscriber’s NRO account according to the Foreign Exchange Management Act (FEMA) guidelines stipulated by the Reserve Bank of India (RBI).

How Useful Is OCI Card In NPS:

As India does not allow dual citizenship, if a person opts for another country’s citizenship, renouncing Indian citizenship becomes compulsory. Yet, an OCI card is a valid document to continue the NPS account and availing its benefits.

The new rules are only for those who have renounced Indian citizenship but do not hold an OCI card.