Bank of Baroda has entered the pension fund business after receiving the PFRDA Certificate of Appointment as a Sponsor of a Pension Fund. The announcement was made on NPS Diwas 2026. With this, Bank of Baroda has become the second public sector bank to enter the pension fund business.
The first public sector bank to enter the pension fund business was State Bank of India (SBI). SBI entered the pension fund business in April 2008 through SBI Pension Funds Private Limited. Bank of Baroda is now the second PSU bank to enter the pension fund business, following its PFRDA appointment in 2026. SBI Pension Funds is currently one of the three public-sector pension funds listed by PFRDA, along with LIC Pension Fund and UTI Pension Fund.
The certificate was presented by Sanjay Lohiya, IAS, Secretary, Department of Financial Services (DFS), to Dr. Debadatta Chand, Managing Director and CEO of Bank of Baroda. S. Raman, Chairperson, PFRDA, and Dinesh Kumar Khara, Chairperson, NPS Trust, were also present on the occasion.
What is Pension Fund Business?
In simple terms, pension fund business means managing people’s retirement savings and investing that money to generate returns for their future pension/retirement needs. In India, this is mainly done under the National Pension System (NPS), which is regulated by PFRDA (Pension Fund Regulatory and Development Authority).
How it works
For example:
- A person invests money in an NPS account.
- The money is collected and managed through the NPS system.
- A Pension Fund Manager (PFM) invests the money in assets such as government securities, corporate bonds and equities, according to the applicable investment choice.
- The investments generate returns over time.
- The accumulated retirement corpus can later be used according to NPS withdrawal and annuity rules.
So what does a bank do?
When a bank such as Bank of Baroda enters the pension fund business, it is not simply selling normal bank deposits.
The bank can become a sponsor of a pension fund and establish/own a pension fund entity, subject to PFRDA regulations. That pension fund manages NPS subscribers’ retirement money and invests it according to the permitted investment framework.
So, in very simple words:
Bank → Pension Fund → Manages NPS money → Invests it → Generates returns → Builds retirement corpus
This is why Bank of Baroda receiving the PFRDA Certificate of Appointment as Sponsor of a Pension Fund is significant: it allows the bank to participate in the pension fund-management business, subject to regulatory requirements.
