Big Change for NPS Subscribers: What Happens to Your Account After Leaving India?

The Pension Fund Regulatory and Development Authority (PFRDA) has introduced stringent guidelines for National Pension System (NPS) subscribers who renounce Indian citizenship without obtaining an Overseas Citizen of India (OCI) card. Effective from April 21, 2025, these rules mandate the closure of NPS accounts for such individuals, with their pension corpus transferred to a Non-Resident Ordinary (NRO) bank account under Foreign Exchange Management Act (FEMA) regulations. This move aligns with India’s prohibition on dual citizenship, ensuring compliance with legal and financial frameworks.

Big Change for NPS Subscribers
Under the new directives, NPS account holders must promptly notify the NPS Trust of their change in citizenship status, submitting proof such as a renunciation certificate, surrendered passport, or a cancelled Indian passport. Additionally, a signed declaration confirming the absence of an OCI card is required. Once verified, the NPS Trust and Central Recordkeeping Agencies (CRAs) will process the account closure, transferring the accumulated pension wealth to the subscriber’s NRO account. This ensures that funds are managed in accordance with India’s financial regulations for non-residents.

New NPS Regulations

The PFRDA’s updated policy addresses the unique circumstances of former Indian citizens who acquire foreign nationality, as NPS accounts are designed for Indian citizens, NRIs, and OCI holders. The closure process is structured to safeguard subscribers’ financial interests while maintaining regulatory transparency. For those planning to leave India permanently, these guidelines emphasize the importance of understanding the implications for retirement savings. As the NPS continues to evolve, these changes reflect the PFRDA’s commitment to adapting to global mobility trends while upholding India’s legal standards, urging affected subscribers to act swiftly to comply with the new requirements