According to a circular issued by the regulator, the amendment follows in-principle approval from the Department of Economic Affairs, Ministry of Finance, for the issuance of INR-denominated bonds by NDB.
What has changed
PFRDA has updated its investment guidelines for both government and non-government NPS schemes to include NDB alongside existing multilateral institutions such as the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the Asian Development Bank (ADB).
With this change, rupee bonds issued by NDB will now qualify as eligible debt instruments under NPS.
Key conditions unchanged
The regulator clarified that all other investment norms remain intact. These include:
- Minimum credit rating requirement of AA or above
- Existing maturity and exposure limits as per NPS investment framework
The revised norms have come into effect immediately.
Why it matters for investors
The inclusion is expected to modestly expand the investment options available to pension funds under NPS, potentially improving diversification in the debt portfolio without altering risk parameters, given that credit rating and eligibility standards remain unchanged.
The move also reflects a gradual broadening of access to high-quality multilateral debt instruments within India’s pension investment framework.
