Page 11 - Banking Finance November 2024

ROUNDUP

The tapering of equity allocation under
BLC is similar to existing LC 50 where
the equity is capped at 50 per cent but
the equity tapering starts at the age
of 45 instead of 35.
Under BLC, equity allocation up to 50
per cent is maintained until the age of
Ò»©­ 45. The reduction in equity allocation
starts from the age of 45, instead of
35 and at age 55, equity allocation re-
mains at 35 per cent, sources ex-
plained. Private sector (nongovern-
ment sector) is currently the fastest
growing segment in the NPS ecosys-
tem with assets under management of
Free fortified rice scheme extended till December about Rs. 2.6 lakh crore as of mid-Sep-
2028 tember.
The Union Cabinet approved the continuation of fortified rice distribution Non-government sector has seen fre-
under the food security law and other welfare schemes until December 2028, netic growth in last four years with as-
which may cumulatively cost the government over Rs. 17,000 crore since sets under management growth of 25
fortification programme began in 2022. per cent between March 2020 and
March 2024.
Fortified rice is made as per the standards fixed by food safety regulator FSSAI,
which has prescribed blending rice with three micronutrients - Iron, Folic Acid On a year-on-year basis, private sector
and Vitamin B12. The rice fortification process involves the addition of Forti- NPS has grown 40 per cent as of Sep-
fied Rice Kernels (FRK) enriched with micro-nutrients to regular rice (custom tember 15.
milled rice). With the latest PFRDA move to intro-
Experts said benefits are far more than risks in the fortification programme, duce Balanced Life Cycle Fund, there
which is implemented in 140 countries. As India has the highest mortality in are four life cycle funds for subscribers
the world due to bleeding during delivery, rice fortification aims at helping to choose. These are Conservative (LC-
the government to offset it. The micronutrient content in fortified rice is much 25 with equity allocation up to 25 per
higher than brown or parboiled rice, some experts claimed. cent); Moderate (LC-50); Aggressive
(LC-75) and now BLC.
Information & Broadcasting Minister Ashwini Vaishnaw said the total finan-
cial implication to supply free fortified rice will be Rs. 17,082 crore, fully funded Gold loan segment to hit
by the Centre.
Rs. 10L crore this fiscal

PFRDA sweetens NPS deal This new fund -launched on the occasion Gold loans (GL) provided by banks and
of Pension Diwas - focuses on growth non-banking financial companies
for private sector, assets, particularly equity investments, (NBFCs) are projected to surpass Rs. 10
launches balanced life providing more flexibility and potential lakh crore in the current financial year
for higher returns for NPS subscribers. and soar to around Rs. 15 lakh crore
cycle fund option by March 2027.
The big benefit is ease of choice
Pension regulator PFRDA has intro- through automatic rebalancing of as- The dominance of banks in the orga-
duced the Balanced Life Cycle Fund set classes. Also more equity exposure nized gold loan market is expected to
(BLC), a life cycle fund option for pri- is available during the working years, persist, driven by their gold jewellery-
vate sector (all citizen model and cor- leading to a substantial retirement cor- backed agriculture loans. Meanwhile,
porate NPS) subscribers. pus over the long term. NBFCs are anticipated to lead in retail

10 | 2024 | NOVEMBER | BANKING FINANCE