Union Bank Eyes Partnership with Japan's Daiichi to Enter Pension Fund Market via NPS Sponsorship

As per The Mint report, Union Bank of India is set to launch a pension fund business in collaboration with Japan's Daiichi, leveraging regulatory changes allowing banks to independently sponsor funds under the National Pension System (NPS). 

Union Bank's Strategic Entry into Pension Funds 

Following recent regulatory amendments, Union Bank plans to introduce its pension fund operations, potentially in 2026. These changes permit scheduled commercial banks to sponsor pension funds independently.  

Union Bank's joint venture with Daiichi Life International Holdings aims to capitalise on these developments, although regulatory approvals are pending.  

This initiative aligns with Union Bank's existing insurance collaboration with Daiichi, Star Union Dai-ichi Life Insurance, established in 2009. 

Regulatory Framework and Market Conditions 

The decision to enter the pension sector follows the Pension Fund Regulatory and Development Authority's (PFRDA) December 2025 amendment.  

Previously, banks needed a partner with at least ₹50,000 crore in assets to sponsor a pension fund.  

The amended guidelines facilitate banks' independent ventures, enhancing competition and strengthening subscriber security within the pension ecosystem. 

Growing Interest in the Pension Space 

The new framework has sparked interest across the banking sector. Prominent players, such as Bank of Baroda, are also exploring opportunities in the pension fund market.  

Recent statements from PFRDA indicate this move could significantly impact the segment, fostering more independent sponsorships.  

At present, India hosts 10 pension fund managers, including those backed by HDFC, ICICI Prudential, Kotak Mahindra, and SBI. 

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Current Market Dynamics 

As of FY26, NPS assets totalled ₹16 trillion, dominated by government employee contributions. Meanwhile, the mutual fund industry has amassed ₹73 trillion in assets.  

Despite the NPS's respectable growth, it still lags compared to the mutual fund sector, reflecting substantial growth opportunities in the pension market. 

Union Bank of India Share Price Performance  

As of April 29, 2026, at 10:45 AM, Union Bank of India share price on NSE was trading at ₹170.57 up by 0.05% from the previous closing price. 

Conclusion 

Union Bank's planned entry into the pension fund market, in partnership with Daiichi, highlights a strategic shift among Indian banks following regulatory changes. This new venture signifies the increasing role financial institutions play in expanding asset management services within India's financial landscape. 

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