PPFAS, Bank of Baroda seek nod to manage pension funds

A window for applications is expected to open soon, one of the people said.

Asset manager Parag Parikh Financial Advisory Services Ltd. and at least two other institutions are in talks with India’s pension regulator to enter the nation’s $175 billion retirement savings industry.

“We have got our board approval to apply for pension investment license,” Neil Parag Parikh, chief executive officer at PPFAS Mutual Fund, said by phone. “We are in the process of applying to the pension regulator.”

Bank of Baroda and another company are also talking to the Pension Fund Regulatory and Development Authority or PFRDA for asset manager licenses, people familiar with the matter said, asking not to be identified as the discussions are private. A window for applications is expected to open soon, one of the people said.

PFRDA and Bank of Baroda didn’t immediately respond to requests for comments.

The interest from new players comes after the regulator in September permitted individual pension houses to launch tailor-made investment plans, giving more options to subscribers. Currently, 10 pension fund managers operate under the so-called National Pension System, according to the the body’s official website.

The regulator has got inquiries from two large banks to enter the pension fund management business, The Economic Times reported last month, citing PFRDA Chairman Sivasubramanian Ramann.

Investments under NPS, which started over two decades ago, are organized into four buckets: equities, corporate bonds, government bonds and alternative investment funds, which include instruments such as REITs and infrastructure investment trusts, or InVITs.

Other asset managers under NPS include SBI Pension Funds Pvt. Ltd, ICICI Prudential Pension Funds Management Co. and HDFC Pension Fund Management Ltd.