New Delhi, Jan. 1 -- In a move that could materially widen access to pension products, the Pension Fund Regulatory and Development Authority (PFRDA) board has given an in-principle nod to allow scheduled commercial banks to directly set up pension funds to manage the National Pension System (NPS). The move is expected to deepen distribution and increase competition among fund managers.

The proposed framework seeks to address existing regulatory constraints that had so far limited bank participation in the pension sector, the finance ministry statement said on Thursday. By introducing a clearly-defined eligibility criteria based on net worth, market capitalization and prudential soundness in line with Reserve Bank of India's norms, the go...