Axis MF applies for NPS

The fund house, which completed three years recently, wants to be a pension fund manager

Axis Asset Management Co has applied to the Pension Fund and Regulatory Development Authority (PFRDA) to become a pension fund manager under the National Pension System (NPS).

The company became eligible after PFRDA in July last year removed the cap on the number of fund managers.  Rajiv Anand, managing director and chief executive of Axis AMC, said: “We plan to set up the fund which will be a joint venture between Axis AMC and Axis Bank. We expect to file our application to the PFRDA very soon.”

The company didn’t apply last year since it did not have three years of fund management experience – the basic qualification required for managing NPS money. “We have started work on the corporate structure to become the pension fund manager. The boards of Axis AMC and Axis Bank have already given their go-ahead on our entry into the NPS business,” added Anand. Reliance, UTI Retirement Solutions, ICICI, Kotak and State Bank of India (SBI) are the existing pension fund managers.

Axis’ application comes at a time when mutual fund houses have complained of lower fund management fee. The PFRDA has increased the fund management fees from 0.009 per cent to 0.25 per cent recently.

IDFC pulled out of NPS in October last year by not renewing its tenure as a pension fund manager (PFM). The IDFC investors were moved to State Bank of India (SBI)’s pension fund automatically.  PFRDA wrote to all the investors recently, allowing them to shift to any other fund manager. DSP Blackrock has recently become a fund manager.

Out of the existing PFMs, SBI will have the largest reach in selling NPS. This is because SBI pension fund has the advantage of selling this scheme through its large network 15,000 bank branches. Whereas, currently Axis has over 1,700 bank branches across India.