PFRDA to allow pension funds for investments in sovereign green bonds

The AUM is expected to touch Rs 11 trn by the end of FY24

Pension Fund Regulatory & Development Authority (PFRDA) chairman Deepak Mohanty on Tuesday said that the regulator will allow pension funds to invest in sovereign green bonds when issued.

 The government is expected to issue sovereign green bonds in the second half of the current financial year (H2FY24) as part of overall market borrowing programme.

Currently, there are 10 pension fund managers which manage funds under the National Pension System (NPS).

In the last fiscal year (FY23), the government raised Rs. 16,000 crore through the issuance of maiden sovereign green bonds with the objective to utilise the proceeds for funding public sector projects seeking to reduce carbon emissions.

Currently, the PFRDA's assets under management (AUM) is at Rs. 9.8 trillion and will certainly be more than Rs. 11 trillion by FY24-end, Mohanty said.

Talking about Atal pension Yojana (APY) saturation drive, Mohanty said 2.9 million new subscribers have been enrolled during the first quarter of the current fiscal year (Q1FY24) against 2.7 million in Q1FY23.

The regulator has set a target of 13 million new subscribers under the APY scheme in FY24 as against 12 million in FY23.
 

In all, 55 million enrolments have taken place since the launch of the scheme in 2015.

APY is the guaranteed pension scheme of the Government of India, providing a monthly pension in the range of Rs. 1000-5000 to self and spouses, with the return of accumulated corpus to the surviving nominees.
 

During the day, PFRDA reviewed performance and strategies of banks and State Level Bankers' Committees for 2023-24 to accelerate comprehensive coverage of APY.

The State Level Bankers' Committee in the North Zone have contributed significantly towards the annual target of FY23 with Uttar Pradesh achieving 165 per cent of the target, followed by Madhya Pradesh (145 per cent), and Rajasthan (117 per cent), Mohanty said.