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Good News For NPS Subscribers: The Pension Fund Regulatory and Development Authority (PFRDA) is going to make a big change for the National Pension System (NPS) subscribers from July 1, which will directly benefit the NPS subscribers. PFRDA is going to implement T+0 settlement under NPS, which will come into effect from July 1. Under the new rules, NPS contributions received by the trustee bank by 11:00 am (T) on any settlement day will be invested on the same day and subscribers will get the benefit of NAV (Net Asset Value) on the same day.
In simple language T+0 settlement means that any investment or claim is settled on the same day. Similarly T+1 means that the settlement is done a day after the claim or investment. PFRDA has revised the same rules under NPS and will implement T+0 settlement from July 1.
Understand the new rules in simple language
To understand the new rule better, if a subscriber makes his contribution by 11 am on a settlement day, it will be invested on the same day and he will get the benefit of Net Asset Value (NAV) on the same day. Currently the contribution received by the trustee bank is made on the next settlement day i.e. T+1 settlement rule applies.
According to the new system, trading in shares will take place on the same day the investment or sale is made. This means that the shares will be transferred to the investor's account immediately, while the amount will be credited to the selling investor's account immediately.
PFRDA said in its statement that contributions made till 9:30 am on any settlement day were already considered for investment on the same day. Now, D-Remit contributions received till 11:00 am will also be invested along with NVA on the same day.
What was the rule earlier?
Earlier the contributions were invested on the next settlement day (T+1), which meant there was a delay of one day in making the investments. Also, the D-Remit contributions received till 9:30 am are considered for investment on the same day itself. Currently, the contributions received through D-Remit till 11:00 am will also be invested on the same day using the applicable Net Asset Value (NVA).
NPS has a lot of subscribers
This change is aimed at streamlining the investment process and increasing the efficiency of NPS transactions. PFRDA added 947,000 new subscribers to NPS in the non-government sector in 2023-24, increasing the AUM of NPS by 30.5% annually to Rs. 11.73 lakh crore. The total NPS subscriber base as of May 31, 2024 is 180 million.