The Employees’ Provident Fund Organisation (EPFO) is learnt to have gotten clearance from the Finance Ministry for rate of interest suggestion of 8.5 per cent for FY20 and is predicted to credit score it to subscribers in subsequent few days. The retirement fund physique is crediting the rate of interest in a single go of 8.5 per cent as a substitute of a cut up of 8.15 per cent and 0.35 per cent proposed earlier, a senior official mentioned.
“Officials of both labour and finance ministries held meetings this week regarding the interest rate proposal. The Finance Ministry has raised some concerns regarding the risky investments, for which it has sought more details, but has given its nod for the interest rate proposal,” the official mentioned, including that it must be credited in a number of days. Queries despatched by The Indian Express to the Finance Ministry went unanswered.
The Central Board of Trustees of the EPFO had in September advisable splitting fee of the rate of interest of 8.5 per cent advisable for monetary yr 2019-20 into two elements, citing “exceptional circumstances arising out of Covid-19”.
The EPFO had then mentioned it is going to credit score 8.15 per cent to its over six crore subscribers for the yr instantly and provides the remaining 0.35 per cent, which is linked to its fairness investments, “before December 31”. This, it had mentioned, was topic to redemption of its items invested in exchange-traded funds or ETFs.
The Finance Ministry had questioned the 2018-2019 rate of interest of 8.65 per cent as effectively, moreover the EPFO’s publicity to IL&FS and related dangerous entities. It has been nudging the EPFO to scale back the speed to sub-8 per cent degree consistent with the general rate of interest state of affairs. Small financial savings charges vary from 4.0-7.6 per cent.
