EPFO is likely to credit 8.5 per cent rate of
interest for 2019-20 in the employees' provident fund (EPF) accounts of around
sixty million subscribers in one go by the end of December’2020.
Earlier in September
this year, the Employees Provident Fund Organization had decided to split 8.5 per cent
interest into two installments of 8.15 per cent and 0.35 per cent in its
trustees meet.
A highly
placed source told PTI that the Labour Ministry has sent a proposal to the
Finance Ministry to give concurrence to credit 8.5 per cent rate of interest on
EPF for 2019-20 earlier this month. The source further said that earlier the
Ministry of Finance had sought some clarifications on the rate of interest for
the last fiscal, which were duly addressed.
In March this year, the EPFO's apex decision making
body Central Board of Trustees headed by Labour Minister Santosh Gangwar had
approved 8.5 per cent interest rate on EPF for 2019-20.
In a virtual CBT
meeting in September, the EPFO had decided to honour its commitment to provide
8.5 per cent rate of interest for the last fiscal. But the CBT had also decided
to split the rate of interest into two installments of 8.15 per cent and 0.35
per cent in view of the pandemic.
The labour ministry
had then explained that "in view of exceptional circumstances arising out
of COVID-19, the agenda regarding interest rate was reviewed by the CBT and it
recommended the same rate of 8.50 per cent to the Central Government.
As planned earlier, the EPFO had to provide 8.15 per cent interest on EPF soon
after seeking Ministry of Finance nod. It has planned to credit the remaining
0.35 per cent rate by December 31, after proposed liquidation of ETFs.
The EPFO had earlier
planned to liquidate some of its investment in ETFs to provide 8.5 per cent
interest for the last fiscal.
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