Bank of Baroda received the Certificate of Appointment as Sponsor of a Pension Fund from the Pension Fund Regulatory and Development Authority (PFRDA) on 1 October 2026 during the NPS Divas 2026 event in New Delhi. The certificate was handed over to Managing Director and Chief Executive Officer Debadatta Chand and enables the bank to sponsor its subsidiary, BoB Pension Fund Management Company Limited. With this approval, Bank of Baroda has become the second public sector bank after State Bank of India (SBI) to enter the pension fund business.
What Is PFRDA and What Is Its Role in NPS?
The Pension Fund Regulatory and Development Authority (PFRDA) is the statutory regulator for pensions in India. It regulates the National Pension System (NPS) and the Atal Pension Yojana (APY). It registers pension funds and protects the interests of subscribers through rules on investment and costs.
PFRDA stands for Pension Fund Regulatory and Development Authority. The interim authority was set up on 23 August 2003 to develop the pension sector. Parliament passed the PFRDA Act, 2013 on 19 September 2013. The Act came into force on 1 February 2014. From that date, PFRDA became a statutory body corporate. It functions under the jurisdiction of the Ministry of Finance. Its head office is at the World Trade Centre, Nauroji Nagar in New Delhi.
The Chairperson of PFRDA is Sivasubramanian Ramann (as of October 2026). He assumed charge on 20 June 2025 for a tenure of five years. The Authority consists of a Chairperson, three whole time members and three part time members. They are appointed by the Central Government from persons with knowledge of economics, finance or law.
PFRDA regulates NPS and pension schemes covered under the PFRDA Act. NPS started on 1 January 2004 as a contributory scheme for new Central Government employees, except the armed forces. It was extended to all citizens on 1 May 2009 on a voluntary basis. Almost all state governments have now adopted NPS for their employees. PFRDA also administers APY, which was launched on 1 June 2015 for workers in the unorganised sector. The stated objective of PFRDA is to promote old age income security by establishing, developing and regulating pension funds.
In NPS, PFRDA registers and supervises intermediaries such as pension funds, central recordkeeping agencies, trustee banks, custodians and points of presence. The Authority approves investment norms and lays down guidelines for management of the pension corpus. It ensures that intermediation costs remain low and reasonable. It sets up grievance redressal systems and takes steps to improve pension literacy. The NPS Trust, set up on 27 February 2008, holds NPS assets in the interest of subscribers and monitors the working of pension funds.
What Is a Pension Fund and How Does It Work?
A pension fund is a regulated investment manager that collects retirement savings, invests them as per rules and pays them back at retirement. In NPS, a pension fund manager invests subscriber contributions across equity, corporate bonds and government securities. The NPS Trust owns the assets on behalf of subscribers.
A pension fund in NPS receives contributions from subscribers, pools them and invests them under PFRDA investment guidelines. Each subscriber has an individual pension account identified by a Permanent Retirement Account Number (PRAN). The pension fund reports the daily Net Asset Value (NAV) of each scheme to the central recordkeeping agency. At retirement or exit, the subscriber uses a part of the corpus to buy an annuity that pays a monthly pension. The account is portable across jobs and locations.
A sponsor and a pension fund are two different roles. A sponsor is a body corporate that proposes to hold 20 percent or more of the paid up equity capital of the pension fund to be established. The sponsor promotes and capitalises the pension fund company. The pension fund is the operating company that actually manages the money after it gets a Certificate of Registration under Section 27 of the PFRDA Act. Under the PFRDA (Pension Fund) Regulations, 2015 and the Registration of Pension Funds Guidelines, 2026, registration is a two step process. In the first step, PFRDA selects and appoints the sponsor. In the second step, the sponsor incorporates the pension fund and seeks registration for it.
NPS offers Tier I and Tier II accounts. Tier I is the main retirement account with tax benefits and restrictions on withdrawal. Tier II is a voluntary savings account with free withdrawal. Within these accounts, pension funds manage standard asset classes which subscribers should know for basic comparison.
| Scheme | Asset Class | Simple Meaning |
|---|---|---|
| Scheme E Tier I | Equity shares | Money invested in company shares for long term growth |
| Scheme C Tier I | Corporate bonds | Money lent to companies through debt papers |
| Scheme G Tier I | Government securities | Money lent to central and state governments |
| Scheme A Tier I | Alternative assets | Small exposure to assets like real estate funds |
Subscribers can choose a pension fund and switch it once in a financial year. Performance is compared through NAV based returns. Tax treatment depends on the tier and stage of contribution, interest and withdrawal, and Tier I contributions enjoy specific deductions under the Income Tax Act.
Bank of Baroda Receives PFRDA Sponsor Certificate
Bank of Baroda received the Certificate of Appointment as Sponsor of a Pension Fund under Section 27 of the PFRDA Act, 2013 on 1 October 2026. The certificate was presented at the NPS Divas 2026 event in New Delhi. PFRDA Chairperson Sivasubramanian Ramann handed over the certificate to Bank of Baroda Managing Director and Chief Executive Officer Debadatta Chand.
The certificate marks the formal entry of Bank of Baroda into the pension fund business. The bank will act as sponsor through its subsidiary, BoB Pension Fund Management Company Limited. The subsidiary will apply for separate registration as a pension fund and will manage NPS assets only after that registration and after signing agreements with the NPS Trust, custodian, trustee bank and central recordkeeping agency.
The appointment follows a selection process under the PFRDA (Registration of Pension Funds) Guidelines, 2026. In July 2026, PFRDA approved the selection of Bank of Baroda along with Motilal Oswal AMC and Bajaj as sponsors of pension funds. Bank of Baroda had earlier received a Letter of Appointment as sponsor on 5 May 2026. The Reserve Bank of India gave approval on 10 July 2026 for incorporation of the subsidiary to undertake pension fund management business.
Bank of Baroda was founded on 20 July 1908 by Sayajirao Gaekwad III in Baroda. The bank was nationalised on 19 July 1969. It is headquartered in Vadodara, Gujarat, with its corporate centre in Mumbai. It is the second largest public sector bank in India after State Bank of India.
BoB Pension Fund Management Company: Structure and Approvals
BoB Pension Fund Management Company Limited is the subsidiary that will carry out the pension business. Bank of Baroda incorporated the company on 21 September 2026 under Section 8 of the Companies Act, 2013. The Registrar of Companies issued the Certificate of Incorporation with Corporate Identity Number U65300MH2026PLC475895. The company is yet to commence commercial operations.
| Particular | Detail |
|---|---|
| Name of subsidiary | BoB Pension Fund Management Company Limited |
| Date of incorporation | 21 September 2026 |
| Authorised share capital | ₹100 crore |
| Bank of Baroda shareholding | 80.10 percent or 8,00,99,950 equity shares of ₹10 each |
| Proposed investment by the bank | ₹80.10 crore |
| Other shareholder | Baroda BNP AMC holds the balance stake |
| Expected completion of investment | 31 December 2026 |
The stated business of the subsidiary is to act as a pension fund manager. This covers receiving contributions, accumulating them, investing the corpus as per PFRDA guidelines, managing pension assets and making payments to subscribers or beneficiaries. Two regulatory clearances supported the incorporation. PFRDA issued the sponsor appointment letter on 5 May 2026. The Reserve Bank of India approved the incorporation of the subsidiary on 10 July 2026 with Bank of Baroda holding 80.10 percent.
Second Public Sector Bank After SBI: The 2008 Precedent
State Bank of India was the first public sector bank to enter the pension fund segment in 2008. SBI Pension Funds Private Limited was incorporated in December 2007 and began operations in April 2008. The company first handled NPS funds of Central Government employees and then extended to state governments, public sector enterprises, corporates and individual citizens. It also manages funds under Atal Pension Yojana.
SBI Pension Funds is sponsored by State Bank of India with SBI Funds Management holding a 20 percent stake. It is among the two pension funds that have managed all NPS schemes since inception. The company held assets under management of around ₹6.04 lakh crore with a market share of about 34 percent as on 30 June 2026. This scale makes it the largest pension fund manager in India.
In 2007, PFRDA had selected SBI, UTI Asset Management and Life Insurance Corporation as the first pension fund managers for government employees. Bank of Baroda now joins this public sector lineage after a gap of 18 years. At present, 10 pension funds are registered with PFRDA, including SBI, LIC, UTI, HDFC, ICICI, Kotak, Aditya Birla Sun Life, Tata, Axis and DSP. The BoB subsidiary will become a new addition once PFRDA grants it a Certificate of Registration as a pension fund.
Significance for Retirement Planning and NPS Expansion
The entry of Bank of Baroda matters because India needs wider retirement coverage. NPS is a low cost, portable and market linked retirement plan. It allows a subscriber to choose a pension fund, select an asset mix and stay invested till retirement. The long accumulation period helps small monthly contributions grow into a retirement corpus.
PFRDA has set a near term target of adding 2 crore to 4 crore new NPS subscribers in the next two to three years. The long term aim is to bring every worker under NPS by 2047. The total NPS architecture covered 8.4 crore subscribers with assets of ₹14.43 lakh crore as on 31 March 2025. Enrolment under APY stood at 7.6 crore. New products such as NPS Vatsalya, launched on 18 September 2024 for minors below 18 years, show the push to start saving early.
A large branch network helps this expansion. Bank of Baroda has more than 8,400 branches and over 10,000 ATMs. The bank has also introduced Tatkal NPS on the BHIM app in the second phase of rollout. The integration allows paperless opening of NPS accounts on a digital payments platform. This reduces paperwork and onboarding time for young and first time savers.
Competition among fund managers also affects subscribers. PFRDA publishes NAVs and standardises performance disclosure. This lets subscribers compare returns under Scheme E, Scheme C and Scheme G across managers. The entry of a second public sector bank sponsor adds choice in the government and private segments. It also strengthens trust among subscribers who prefer a public sector institution to manage long term savings.
Key Takeaways
- Bank of Baroda received the Certificate of Appointment as Sponsor of a Pension Fund from PFRDA on 1 October 2026 at the NPS Divas 2026 event.
- Bank of Baroda is the second public sector bank to enter pension fund sponsorship after SBI, which started operations through SBI Pension Funds in April 2008.
- The sponsor vehicle, BoB Pension Fund Management Company Limited, was incorporated on 21 September 2026 with authorised capital of ₹100 crore and 80.10 percent holding by Bank of Baroda.
- A sponsor under PFRDA norms holds 20 percent or more of the paid up equity of the pension fund and must secure a Certificate of Registration under Section 27 of the PFRDA Act, 2013 for the fund to operate.
- PFRDA became a statutory body under the PFRDA Act, 2013 effective 1 February 2014 and regulates NPS and APY from its head office in New Delhi.
- SBI Pension Funds, incorporated in December 2007, manages around ₹6.04 lakh crore with about 34 percent market share as on 30 June 2026.
