The Bill would not have much impact on FDI: Yogesh Agarwal

Interview with Chairman, PFRDA

After much dallying, the Lok Sabha on Wednesday passed the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2011, giving statutory powers to the interim regulator. PFRDA Chairman Yogesh Agarwal tells Indivjal Dhasmana there would for now be no real impact on foreign direct investment. Edited excerpts:

Will keeping the FDI cap at 26 per cent hinder development of the sector?

Not really. It is not like the insurance sector, where the requirements are huge. The 26 per cent FDI cap already exists in the pension sector. A single pension fund requires Rs 25 crore. There are eight, so the FDI requirement is Rs 200 crore. Raising it to 49 per cent would give an extra Rs 40-45 crore only.

Will the Bill boost foreign investor sentiment?

Two to three FDI investors are (already) there in pension funds. The Bill would not have much impact; it’s a non-issue. Pension funds are there for three to four years now.

Then how would the Bill boost the sector?

Through regulatory norms. It would give statutory powers to the regulator.

After the law comes into force, who would regulate pension products of, say, insurance companies?

The New Pension System (regulated by PFRDA) is the only genuine plan. Pension products of insurance companies are already there. Going forward, NPS would be the only genuine pension programme.

When would you frame rules and regulations after the PFRDA law is enacted?

Rules and regulations are already there. These would be formally announced once the law comes into effect. We would tweak rules according to the law.