Pension Funds Will Soon Be Able To Invest In Sovereign Green Bonds, Per PFRDA; Information Inside

According to a PTI article from last week, Deepak Mohanty, the chairman of the Pension Fund Regulatory & Development Authority (PFRDA), stated the regulator will allow pension funds to participate in sovereign green bonds (SGrBs). As part of the broader market borrowing program, the government is anticipated to issue sovereign green bonds in the second half of this fiscal year.

The government issued its first sovereign green bond in FY23, raising Rs 16,000 crore, with the intention of using the proceeds to finance public sector initiatives aimed at reducing carbon emissions.

Mohanty claims that the PFRDA’s assets under management (AUM) now stand at Rs 9.8 trillion and would undoubtedly surpass Rs 11 trillion by the end of FY24.

According to Mohanty, who was speaking about the Atal Pension Yojana (APY) saturation push, 29 lakh new subscribers were registered in the program during the first quarter of the current fiscal year (Q1FY24), up from 2.7 million in the prior quarter.

In FY24, PFRDA wants to add 13 million new APY customers, up from FY23’s 12 million. There have been 55 million enrollments since the program’s 2015 start.

In order to provide a universal social security system for all Indians, particularly the poor, the underprivileged, and those employed in the unorganized sector, the government-sponsored Atal Pension Yojana (APY) was introduced. Pension Fund Regulatory and Development Authority (PFRDA) is responsible for managing APY.

All bank account users between the ages of 18 and 40 are eligible for APY, and the contributions vary according on the pension amount selected. At the age of 60, participants would begin receiving the guaranteed minimum monthly pension of Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, or Rs. 5000. In order to hasten full APY coverage, the PFRDA assessed the performance and business plans of banks and state-level bankers’ committees (SLBCs) for 2023–2024.

According to Mohanty, the State Level Bankers’ Committee in the North Zone made a significant contribution toward the achievement of the FY23 objective, with Uttar Pradesh reaching 165% of the goal, followed by Madhya Pradesh (145%) and Rajasthan (117%). According to him, as of July 15 there were more over 1.98 crore APYs in the states in the north zone.