New Delhi: Private sector lender Axis Bank will replace state-run Bank of India (BoI) as the trustee bank for the National Pension System (NPS) from July onwards.
According to Pension Fund Regulatory and Development Authority (PFRDA), Axis Bank has been "appointed as the new NPS Trustee Bank with effect from July 1, 2013 in place of Bank of India (current Trustee Bank)".
The government introduced the National Pension System (NPS) in 2004 and at present it covers all new entrants to Central Government services (excluding Armed Forces) and State Government services.
Besides, it is also available to all other citizens of India on voluntary basis.
While NPS Trust is responsible for taking care of the funds under the NPS, the Trust holds accounts with the bank designated as NPS Trustee Bank. The NPS Trustee Bank facilitates fund transfers across various entities of Central Record Keeping Agency system -- Nodal Offices, Pension Fund Managers and Annuity Service Providers.
PFRDA had appointed Bank of India as Trustee Bank for NPS for a period of 5 years. It is understood that Axis Bank will be appointed for a period of two years. However, at the discretion of PFRDA/NPS Trust, the contract may be renewed annually for another maximum tenure of three years.
NPS currently has a corpus of over Rs 28,400 crore of 44.93 lakh subscribers. Around 2 lakh subscribers are from the private sector while 27 lakh are from central and state governments. Around 15.79 lakh subscribers are served by NPS-Lite, which is designed to ensure ultra-low administrative and transactional costs.