Union Cabinet on Tuesday gave  its post-facto approval for launching Varishtha Pension Bima Yojana 2017 (VPBY 2017). 

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As per the Ministry, the scheme will be implemented through Life Insurance Corporation of India (LIC) during the current financial year to  provide social security during old age and protect elderly persons aged 60 years and above against a future fall in their interest income due to uncertain market conditions.

Under the scheme, the government will provide assured pension based on a guaranteed rate of return of 8% per annum for ten years. The pension holder will have an option to opt for pension on monthly, quarterly, half yearly and annual basis. 

However, the differential return or the difference between return generated by LIC and the assured return of 8% per annum would be borne by the government of India as subsidy on an annual basis.

The scheme will be open for subscription for a period of one year from the date of launch, Ministry added. 

Moreover, the cabinet also gave its post-facto approval for National Bank for Agriculture & Rural Development (NABARD) to make short term borrowings at prevailing market rate of interest for approx. Rs 20,000 crore for on-lending to Cooperative Banks at 4.5% rate of interest.