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Retirement fund body <keyword id="6372438" type="General" weightage="100" keywordseo="epfo" source="Orion">EPFO</keyword> is likely to approve this month a proposal to enhance its investments in equites to up to 20 per cent of the investible deposits from the current limit of 15 per cent. The proposal is expected to be considered and approved during the EPFO trustees' meeting scheduled to be held on July 29 and 30, according to a source. At present, EPFO can investment 5 to 15 per cent of the investible deposits in equity or equity-related schemes. The proposal to revise the limit to 20 per cent has been vetted and approved by the Employees' Provident Fund Organisation's (EPFO) advisory body Finance Audit and Investment Committee (FAIC). The recommendation of FAIC will be placed before the EPFO apex decision making body -- <keyword id="225704" type="General" weightage="50" keywordseo="central-board-of-trustees" source="Orion">Central Board of Trustees</keyword> (<keyword id="207775" type="General" weightage="50" keywordseo="cbt" source="Orion">CBT</keyword>) -- for consideration and approval. "The Central Board of Trustees (CBT) headed by Union Labour Minister is likely to approve the recommendation of the FAIC for increasing the investment in equity and equity related scheme to 5-20 per cent from existing 5-15 per cent," the source said. In a written reply to Lok Sabha on Monday, Minister of State for Labour and Employment Rameshwar Teli said, "FIAC, a sub-committee of CBT, <keyword id="45027" type="General" weightage="50" keywordseo="epf" source="Orion">EPF</keyword>, has recommended for the proposal to increase investment in equity and related investments in category IV of the Pattern of Investment from 5-15 per cent to 5-20 per cent for consideration of CBT, EPF." EPFO had started investing in Exchange Traded Funds (ETFs) in August 2015, putting 5 per cent of its investible deposits in stock-linked products. It was raised to 15 per cent for the current fiscal. Trade unions have been opposing any investment in stock markets by EPFO as these are not backed by government guarantee. In the written reply, Teli also said the notional return on EPFO equity-related investments rose 16.27 per cent in 2021-22 from 14.67 per cent in 2020-21. The reply also showed that the notional rate of return on equity related investment of the the EPFO was in negative at (-) 8.29 per cent in 2019-20 due to the impact of COVID-19. In 2021-22, the minister said EPFO settled 2,88,15,498 claims for withdrawal of Rs 1,04,959.18 crore by the subscribers. EPFO had settled 2,33,90,550 claims for withdrawal of Rs 91,187.54 crore in 2020-21. The withdrawal amount was Rs 70,202.34 crore in 2019-20 under 1,28,77,354 claims settled by the EPFO. SEE ALSO : <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/cryptocurrency/news/rbi-seeks-a-crypto-ban-but-it-needs-global-collaboration-says-nirmala-sitharaman/articleshow/92954958.cms">RBI seeks a crypto ban but it needs global collaboration, says Nirmala Sitharaman</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/nifty-50-remains-the-top-performer-in-asia-despite-tussle-between-bulls-and-bears/articleshow/92952677.cms">Nifty 50 remains the top performer in Asia despite tussle between bulls and bears</a>

Retirement fund body EPFO could increase its equity investment limit to 20% from 15% earlier

Employee Provident Fund Organisation (<keyword id="6372438" type="ORGANIZATION" weightage="100" keywordseo="EPFO">EPFO</keyword>), India’s <a href="http://www.businessinsider.in/Your-PF-will-now-earn-interest-even-if-your-employer-has-stopped-contributing-to-it/articleshow/51599478.cms">retirement fund</a> body, might be doubling its investment proportion in exchange traded funds (ETFs) to 10% its investment, a move which can shoot up friction with trade unions. 
 
EPFO's finance audit and investment committee (FAIC) set up a panel that suggested doubling the proportion of its investment in ETFs so that it can do a meaningful contribution to the overall portfolio return of the <a href="http://www.businessinsider.in/Low-cost-housing-scheme-for-EPFO-subscribers-soon/articleshow/52194557.cms">EPFO</a>, and a final decision could be taken in EPFO's central board of trustees (CBT) meeting today. 
 
Also read: <a href="http://www.businessinsider.in/PF-money-for-government-flagship-programmes/articleshow/52725007.cms">If you don’t claim your PF now, it could end up in government’s kitty</a> 
 
Till now, EPFO invested 5% of its investible deposits in ETFs even as labour unions opposed it, and now, as the investment is planned to be doubled, the unions are definitely not going to accept it silently. 
 
Also read: <a href="http://www.businessinsider.in/Defer-withdrawal-for-two-years-and-get-8-16-extra-benefit-from-EPFO/articleshow/52881298.cms">Defer withdrawal for two years and get 8.16% extra benefit from EPFO</a> 
 "As per the agenda, the labour ministry will update us on the EPFO's investment in equity as well as place before us the report of the expert group. However, unions will continue to oppose any such investment," DL Sachdev from All India Trade Union Congress (<keyword id="6357806" type="ORGANIZATION" weightage="100" keywordseo="AITUC">AITUC</keyword>), and a member of CBT told <a href="http://economictimes.indiatimes.com/wealth/personal-finance-news/epfo-likely-to-raise-equity-investment-to-10/articleshow/53366787.cms">ET</a>. 
 
<a href="http://www.adamsaccounting.com.au/photos/Investment1.jpg">Image source</a>

EPFO might raise ETF investment to 10%

Even though the Central Board of Trustees (CBT) of retirement body EPFO had decided on an 8.8% interest rate, the Finance Ministry has lowered it and approved an 8.7% interest on PF deposits for over 5 crore subscribers. 
 "The (EPFO's apex decision-making body) CBT, at its meeting held in February 2016, has proposed an interim rate of interest at 8.8 per cent to be credited to the accounts of Employees' Provident Fund subscribers for 2015-16. The Ministry of Finance has, however, ratified an interest rate of 8.7 per cent," Labour Minister <keyword id="115762" type="PERSON" weightage="100" keywordseo="Bandaru-Dattatreya">Bandaru Dattatreya</keyword> said in a written reply to the Lok Sabha today. 
 
This is probably the first time that such thing has happened, when the Finance Ministry has not agreed to the CBT’s rate of interest. 
 
Earlier, EPFO had provided 8.75% rate of interest in 2013-14 and 2014-15, 8.5% in 2012-13 and 8.25% in 2011-12. 
 
As per EPFO's estimates worked out in September, it can easily pay 8.95% rate of interest, leaving a surplus of Rs 100 crore. 
 
<a href="http://economictimes.indiatimes.com/photo/51011641.cms">Image source</a>

Finance Ministry lowers proposed PF interest rate to 8.7% for the first time

Over 4 crore <keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="EPFO">EPFO</keyword> subscribers may get a lower interest at a rate of 8.6 % on their<a href="http://www.businessinsider.in/searchresult.cms?query=provident%20fund&amp;sortorder=score"> PF deposits </a>for current financial year as <keyword id="126926" type="ORGANIZATION" weightage="20" keywordseo="Labour-Ministry">Labour Ministry</keyword> is expected to toe the <keyword id="47209" type="ORGANIZATION" weightage="20" keywordseo="Finance-Ministry">Finance Ministry</keyword> line to <a href="http://www.businessinsider.in/searchresult.cms?query=provident%20fund&amp;sortorder=score">cut the rate</a>. 
 Employees Provident Fund Organisation (<keyword id="45027" type="ORGANIZATION" weightage="20" keywordseo="EPF">EPF</keyword>O) had provided 8.8 % rate of interest on EPF deposits for 2015-16 despite <keyword id="25455" type="ORGANIZATION" weightage="20" keywordseo="finance">Finance</keyword> Ministry's ratification for 8.7 %. 
 
"Finance Ministry has been nudging Labour Ministry to keep <a href="http://www.businessinsider.in/searchresult.cms?query=provident%20fund&amp;sortorder=score">interest rate</a> on EPF in line with other small savings schemes administered by it. There is a broad consensus between the two ministries to fix 8.6 per cent interest for this fiscal," a source privy to the development told a news agency. 
 
The source further said that EPFO has not worked out the income projection for the current fiscal. <a href="http://www.businessinsider.in/searchresult.cms?query=provident%20fund&amp;sortorder=score">The Central Board of Trustees (CBT)</a>, EPFO's apex decision making body, takes a call on interest rate on the basis of income projection. 
 The <keyword id="6364382" type="ORGANIZATION" weightage="20" keywordseo="Board">Board</keyword> fixes the rate of interest for a financial year and it is approved by its advisory body Finance, Audit and Investment Committee (<keyword id="2599383" type="UNKNOWN" weightage="20" keywordseo="FAIC">FAIC</keyword>). 
 As per the practice, Finance Ministry gives concurrence to the rate of interest fixed by the <keyword id="207775" type="TECHNOLOGY" weightage="20" keywordseo="CBT">CBT</keyword> considering the income projections of a year. After its ratification, the interest rate is notified and credited into the accounts of subscribers. 
 
An official said, "Finance Ministry's concurrence is required to ensure that EPFO's payout does not exceed its income and the body meets the fund requirement from its own resources." 
 
"Finance Ministry wants to bring interest rate to 8.6 per cent for its small savings schemes like Public Provident Fund (PPF) in view of depleting yield of government securities and other saving instruments in the market." 
 
Trade unions have been of consistent view that Finance Ministry should not encroach on the decision of CBT as <a href="http://www.businessinsider.in/searchresult.cms?query=provident%20fund&amp;sortorder=score">EPF</a> is workers' money and they get interest from the income earned on investments of their funds. 
 
In the last fiscal, EPFO was in a position to provide 8.95 % rate of interest on the basis of its income projection and it would have left Rs 100 crore surplus. 
 
However, the CBT chose to fix 8.8 % interest on EPF for last fiscal which was further reduced by Finance Ministry to 8.7 %. Facing stiff opposition from all corners, government accepted CBT's decision of 8.8 % interest on EPF for 2015-16. 
 
The EPFO had provided 8.75 % rate of interest in 2013-14 and 2014-15, which was higher than 8.5 % in 2012-13 and 8.25 % in 2011-12.

​ Your provident fund will yield 8.6% interest rate, .2% lower than last year

New Delhi, Mar 5 () Retirement fund body EPFO on Thursday lowered interest rate on provident fund deposits to 8.5 per cent for the current financial year, said Labour Minister Santosh Gangwar on Thursday. The EPFO had provided 8.65 per cent rate of interest on EPF for 2018-19 to its around six crore subscribers. The decision was taken at a meeting of the the Employees' Provident Fund Organisation's (EPFO) apex decision making body -- the Central Board of Trustee. "The EPFO has decided to provide 8.5 per cent interest rate on EPF deposits for 2019-20 in the Central Board of Trustees (CBT) meeting today," Gangwar told reporters after the meeting here. Now, the labour ministry requires the finance ministry's concurrence on the matter. Since the Government of India is the guarantor, the finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal. The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes. The EPFO had provided 8.65 per cent rate of interest to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. KKS MKJ

EPFO cuts interest rate on deposits to 8.5 pc for 2019-20

New Delhi, Dec 2 () Retirement fund body EPFO has invested Rs 86,966 crore in exchange traded funds (ETFs) till September 2019, Parliament was informed on Monday.
The EPFO has been investing in ETFs since August 2015. Initially, the body decided to invest 5 per cent of its investible deposits into stock markets. Later, the proportion was increased to 10 per cent in 2016-17 and 15 per cent in 2017-18 and onwards.
The Employees' Provident Fund Organisation (EPFO) is investing in ETFs based on Nifty 50, Sensex, Central Public Sector Enterprises (CPSEs) and Bharat 22 Indices. 
 "The total amount invested by EPFO in ETFs as on September 30, 2019 is Rs 86,966 crore. The Central Board of Trustees (CBT), Employees' Provident Fund (EPF) in its 207th meeting held on March, 31, 2015 decided to invest only in ETFs in the category of equity and related investments," Labour Minister Santosh Gangwar said in a written reply to the Lok Sabha.
The minister told the House that the EPFO does not invest in shares and equities of individual companies.
The Employees' Provident Funds &amp; Miscellaneous Provisions (EPF &amp; MP) Act, 1952 is applicable to every establishment employing 20 or more persons.
 In order to extend social security benefits to all eligible workers in the country, continuous efforts are made to bring the coverable establishments under the EPF &amp; MP Act, 1952 and also for bringing the eligible employees under the umbrella of schemes under the Act.
 The minister told the House that as on March 31, 2019, 197 industries/classes of establishments are notified for coverage which has brought 4.69 crore contributory members within the ambit of EPFO. KKS
 KKS ANU
ANU

EPFO's investment in ETFs at Rs Rs 86,966 cr till September

(Eds: Adding details) New Delhi, Mar 5 () Retirement fund body EPFO on Thursday lowered interest rate on provident fund deposits to a seven-year low of 8.5 per cent for the current financial year. The the Employees' Provident Fund Organisation (EPFO) had provided 8.65 per cent rate of interest on EPF for 2018-19 to its around six crore subscribers. The decision was taken at a meeting of the the EPFO's apex decision making body -- the Central Board of Trustee (CBT). "The EPFO has decided to provide 8.5 per cent interest rate on EPF deposits for 2019-20 in the CBT meeting today," Labour Minister Santosh Gangwar said here after the meeting. The minister also said that the EPFO will have a surplus of over Rs 700 crore on providing 8.5 per cent rate of interest on EPF for this fiscal. A ministry source said, "The EPFO would have left with a surplus of over Rs 300 crore if it had provided 8.55 per cent rate of interest on EPF for this fiscal. There would have been a deficit if the EPFO had provided a rate of more than 8.55 per cent for current fiscal." The EPF interest rate announced for the current fiscal is lowest since 2012-13, when it was 8.5 per cent. The EPFO had provided 8.65 per cent interest rate to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. Now, the labour ministry requires the finance ministry's concurrence on the matter. Since the Government of India is the guarantor, the finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal. The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes. KKS MKJ

EPFO cuts interest rate on deposits to 7-year low of 8.5 pc for 2019-20

Retirement fund body <keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="EPFO">EPFO</keyword> may provide 9 per cent interest on PF deposits for this fiscal, which is higher compared to 8.75 per cent provided in previous two fiscals to its over five crore subscribers.

	“The income projection of Rs. 34,844.42 crore for the current fiscal is expected to be revised upward. Thus the body can provide 9 per cent rate of interest on PF deposits for 2015-16,” an EPFO trustee and Bharatiya Mazdoor Sangh Secretary PJ Banasure told PTI.

	The Employees Provident Fund Organisation’s (EPFO) Finance Audit and Investment committee (FAIC) recommended 8.95 per cent interest on PF deposits for the current fiscal at its meeting earlier this week.
 Banasure, who is also a member of FAIC said: “If the EPFO provides 8.95 per cent <keyword id="37018" type="UNKNOWN" weightage="20" keywordseo="interest-rate">interest rate</keyword> on PF deposits for 2015—16, it will leave a surplus of Rs. 91 crore as per income projections worked out in September last year. But the FAIC will meet again later this month to vet the latest income estimate which is likely to be revised upward.”

	According to EPFO income projections worked out in September, providing 9 per cent interest on PF will result in a deficit of Rs. 100 crore.

	“We are expecting that there will be a surplus of Rs. 100 crore on providing 9 per cent rate of interest on PF deposits when EPFO will work out the latest estimates. FAIC can change its recommendation in the next meeting and suggest 9 per cent interest rate for 2015—16,” he said.
 The proposal has to be endorsed by the Central Board of Trustees (CBT) before the <keyword id="47209" type="ORGANIZATION" weightage="20" keywordseo="Finance-Ministry">Finance Ministry</keyword> notifies it.
 However, there have been indications from the Finance Ministry that it will slash interest rate on small <keyword id="25450" type="UNKNOWN" weightage="20" keywordseo="savings">savings</keyword> like public provident fund in view of the rate cut by Reserve Bank of India.
 The EPFO provides rate of interest from the earning on <keyword id="6362476" type="ORGANIZATION" weightage="20" keywordseo="investments">investments</keyword> of formal sector workers’ funds without any assistance from the government.

	“If EPFO provides rate of interest from its own income and there is no deficit then I don’t think that Finance Ministry should have any problem with that,” All India Trade Union Congress Secretary DL Sachdev said. 
	 
	(Image credits: BCCL)

EPFO may pay 9% interest on PF deposits for 2015-16

Retirement fund body <a href="http://www.businessinsider.in/searchresult.cms?query=EPFO+">EPFO</a> will invest around Rs 410 crore in exchange trade funds (<keyword id="6357062" type="ORGANIZATION" weightage="60" keywordseo="ETF">ETF</keyword>) every month during the current fiscal. 
 "<keyword id="6372438" type="ORGANIZATION" weightage="80" keywordseo="EPFO">EPFO</keyword> can invest around Rs 410 crore in <a href="http://www.businessinsider.in/searchresult.cms?query=ETF+">ETF</a> every month during this fiscal. The body has planned to invest 5 per cent of its incremental deposits every month," a senior EPFO official told PTI. 
 
The EPFO has received an average monthly incremental deposits of Rs 8,200 crore during this financial year so far. Thus, 5 % of incremental deposits comes to around Rs 410 crore. 
 The Employees' <keyword id="122254" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund-Organisation">Provident Fund Organisation</keyword>'s (EPFO) apex decision making body the Central Board of Trustees' headed by the Labour Minister <keyword id="115762" type="PERSON" weightage="80" keywordseo="Bandaru-Dattatreya">Bandaru Dattatreya</keyword> had decided in March to start investments in stock market. 
 
However, it was assured to the trustees in the meeting that being cautious about the volatile nature of stock market and with no prior experience of such investments, EPFO will start with investing in ETF during the current fiscal. 
 
An ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. 
 
Following the CBT decision, <a href="http://www.businessinsider.in/searchresult.cms?query=Labour+Ministry+">Labour Ministry</a> had notified new investment pattern in April which provided that EPFO will invest a minimum of 5 per cent and up to 15 per cent of incremental deposits in equity or equity-related schemes. 
 
However, EPFO has not invested in any ETF so far, the official said that <a href="http://www.businessinsider.in/searchresult.cms?query=SBI+">SBI</a> Mutual funds has be asked to handhold the body for its investments in the ETF and understand the dynamics of <a href="http://www.businessinsider.in/searchresult.cms?query=stock+market">stock market</a>. 
 
(Image: Indiatimes)

EPFO to invest about Rs 410 crore in ETFs every month

If you had been planning to invest in the property market but couldn’t because of financial constraints then here is a good news. The <a href="http://www.businessinsider.in/searchresult.cms?query=EPFO">Employees' Provident Fund Organisation (EPFO) </a>is going to allow its subscribers to pledge their future <a href="http://www.businessinsider.in/searchresult.cms?query=PF+">PF contributions</a> to buy a low-cost house. This new scheme will facilitate subscribers to buy houses where they will get an advance from their <keyword id="60977" type="ORGANIZATION" weightage="20" keywordseo="PF">PF</keyword> accumulation and pledge their future PF contribution as <keyword id="6357050" type="COMPANY" weightage="20" keywordseo="EMI">EMI</keyword> (Equated Monthly Instalment) payment. 
 <keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="EPFO">EPFO</keyword> trustees, apex decision making body and the <keyword id="225704" type="ORGANIZATION" weightage="20" keywordseo="Central-Board-of-Trustees">Central Board of Trustees</keyword> (CBT) will discuss the proposal in a meeting which is scheduled on 16th September, revealed an Economic Times report. The proposed scheme would work after a tripartite agreement gets signed by the member, bank/housing agency and EPFO for pledging future PF contributions as <a href="http://www.businessinsider.in/searchresult.cms?query=EMI+">EMI payment</a>. 
 
The panel suggested that under the scheme, the subscribers will purchase a dwelling unit with loans from bank or housing finance companies and hypothecation of property in favor of the latter. The benefits under the schemes of Ministry of Housing and Urban Poverty Alleviation will also be extended to the beneficiaries of the scheme. 
 
However, the panel suggests that this scheme should be open for low-income formal workers, who are EPFO subscribers, only. 
 Besides, the CBT headed by the <keyword id="170284" type="POSITION" weightage="20" keywordseo="labour-minister">Labour Minister</keyword> will also take up the proposal to increase the maximum sum assured under its insurance scheme EDLI to Rs 5.5 lakh from existing Rs 3.6 lakh. The proposal will be vetted by a sub-committee tomorrow for making final recommendations to the CBT. 
 
The trustees will also consider a proposal to provide incentives to EPFO pensioners for digitally filing their live certificates which, at present are filled manually. 
 
Image: thinkstock

Soon you can buy your dream home with your PF—like literally!

New Delhi, Mar 1 () The labour ministry is keen to retain an interest rate of 8.65 per cent paid on provident fund deposits to around six crore subscribers of retirement fund body EPFO for the current financial year, a source said. The apex decision making body of Employees' Provident Fund Organisation (EPFO) -- Central Board of Trustees -- is likely to consider the rate of interest on EPF (Employees' Provident Fund) deposits in its meeting scheduled on March 5, 2020. "The proposal to provide interest rate on EPF deposits for 2019-20 may come up for consideration and approval in the Central Board of Trustees (CBT) meeting on March 5," a source said. The source further said that the ministry is keen to retain the interest rate at 8.65 per cent, as was provided in financial year 2018-19. Speculations are rife that the interest rate on EPF may be lowered to 8.5 per cent for the current fiscal, a tad lower than 8.65 per cent provided for 2018-19. According to the source, the agenda for the CBT meeting has not yet been finalised and it is difficult to predict EPFO's income projections for the current fiscal, which will be the basis for fixing the interest rate. The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes. The labour ministry requires the finance ministry's concurrence to provide a rate of interest on EPF deposits in a fiscal year. Since the Government of India is the guarantor, finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal. The EPFO had provided 8.65 per cent rate of interest to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had provided 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. KKS DRR

Labour ministry keen to retain 8.65 pc interest rate on EPF deposits for 2019-20

The <keyword id="179834" type="ORGANIZATION" weightage="20" keywordseo="Organization">organization</keyword> cut down the <keyword id="6397939" type="UNKNOWN" weightage="20" keywordseo="interest">interest</keyword> <keyword id="6375571" type="UNKNOWN" weightage="20" keywordseo="rates">rates</keyword> by 15 basis points to 8.50%from 8.65% in FY19. The <keyword id="68581" type="PERSON" weightage="20" keywordseo="Decision">decision</keyword> came after the central board of trustees meeting of EPFO. "The EPFO has decided to provide 8.5 per cent interest rate on EPF deposits for 2019-20 in the Central Board of Trustees (CBT) meeting today," Gangwar told reporters after the meeting here. Now, the labour ministry requires the finance ministry's concurrence on the matter. Since the Government of India is the guarantor, the finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal. The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes. The EPFO had provided 8.65 per cent rate of interest to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. (with inputs from PTI)

Employee Provident Fund interest rate lowered by 15 basis points 8.5%

<ul><li>Spooked by rising debt defaults, the Employee Provident Fund Organisation has decided to play it safe. </li><li>Not just to private companies, the pension fund has decided to turn cautious even while buying bonds of government companies. </li><li>EPFO also decided to exercise its early redemption options and cut down exposure to the debt-ridden DHFL. </li><li>The recent crisis in non-banking financial companies, sparked by the collapse of IL&amp;FS, has led to an acute credit crunch in the Indian economy. </li></ul> The credit crunch in the Indian economy is getting more acute by every passing day. The latest to join the list of risk-averse financial institutions, spooked by the spike in unpaid loans, is the country’s pension fund. The Employees Provident Fund Organisation (EPFO) which is managed by the ministry of labour and employment, today made a landmark decision to stay away from lending to private sector companies. It has decided to turn cautious while lending to state-owned companies as well. “The Central Board of Trustees (CBT) approved the decision to withhold any further investment in Private Sector Companies Bonds and to compulsorily consider one of the two required ratings necessarily from CRISIL, CARE, ICRA and India Ratings for investments in public sector undertakings’ bonds category,” said a press release on the discussions held today. This will be a heavy blow to the company as<a href="https://www.business-standard.com/article/companies/nbfc-crisis-epfo-decides-to-halt-investment-in-private-sector-bonds-119062001418_1.html"> it invests as</a> much as 20-45% of its incremental funds in debt instruments. And the assets of the organization that manages the pensions of hundreds of millions of Indians is at massive ₹8 lakh crore. This is another big setback for the market sentiment which is already saddled by a slew of bad news about the economy. Sensex tumbled by 581 points today (August 22). Twice bitten This decision probably came after its exposure to the non-banking financial companies like IL&amp;FS which defaulted on payments. Though it officially never declared how much it is owed to by the scam-ridden IL&amp;FS,<a href="https://economictimes.indiatimes.com/markets/stocks/news/epfo-writes-to-finance-ministry-on-exposure-in-ilfs-bonds/articleshow/68135800.cms?from=mdr"> </a>the exposure is estimated at ₹570 crore, <a href="https://economictimes.indiatimes.com/markets/stocks/news/epfo-writes-to-finance-ministry-on-exposure-in-ilfs-bonds/articleshow/68135800.cms?from=mdr">as per reports citing sources</a>. While the direct exposure to infrastructure lending giant would be just 0.1% of EPFO’s total investments, the decision to abstain from making fresh loans to corporates may be triggered by the wave of defaults triggered by the collapse of IL&amp;FS. EPFO has exposure to yet another shadow bank DHFL, which is one of the many companies that crumbled under the IL&amp;FS debacle. In today’s meeting, the pension fund decided to exercise its early redemption options to cut down exposure to the housing finance company which is saddling heavy debt. In 2015, the government had announced that the pension fund would invest more and make the most of the ‘world’s fastest growing economy’ tag. The Finance Minister Arun Jaitley had then said <a href="https://economictimes.indiatimes.com/news/economy/policy/labour-ministry-to-notify-pattern-of-epfo-investment-in-equity-soon/articleshow/46761238.cms?from=mdr">in the Budget </a>that EPFO would invest 5% of its funds into equity and equity related schemes. However, as things turned for the worse in the last three years, EPFO joined the list of lenders and investors who prefer keeping cash safe in the banks instead of lending to risky companies. The resulting credit crunch further hamstrung an already sluggish economy.

You Searched For "EPFO CBT" and got 13 results

Retirement fund body EPFO could increase its equity investment limit to 20% from 15% earlier

PTI

EPFO might raise ETF investment to 10%

BI India Bureau

Finance Ministry lowers proposed PF interest rate to 8.7% for the first time

BI India Bureau

Your provident fund will yield 8.6% interest rate, .2% lower than last year

BI India Bureau

EPFO cuts interest rate on deposits to 8.5 pc for 2019-20

PTI

EPFO's investment in ETFs at Rs Rs 86,966 cr till September

PTI

EPFO cuts interest rate on deposits to 7-year low of 8.5 pc for 2019-20

PTI

EPFO may pay 9% interest on PF deposits for 2015-16

BI India Bureau

EPFO to invest about Rs 410 crore in ETFs every month

BI India Bureau

Soon you can buy your dream home with your PF—like literally!

BI India Bureau

Labour ministry keen to retain 8.65 pc interest rate on EPF deposits for 2019-20

PTI

Employee Provident Fund interest rate lowered by 15 basis points 8.5%

Navdeep Yadav

Indian pension fund says it won’t lend money to private companies

Katya Naidu

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Retirement fund body EPFO could increase its equity investment limit to 20% from 15% earlier

PTI

EPFO might raise ETF investment to 10%

BI India Bureau

Finance Ministry lowers proposed PF interest rate to 8.7% for the first time

BI India Bureau

​ Your provident fund will yield 8.6% interest rate, .2% lower than last year

BI India Bureau

EPFO cuts interest rate on deposits to 8.5 pc for 2019-20

PTI

EPFO's investment in ETFs at Rs Rs 86,966 cr till September

PTI

EPFO cuts interest rate on deposits to 7-year low of 8.5 pc for 2019-20

PTI

EPFO may pay 9% interest on PF deposits for 2015-16

BI India Bureau

EPFO to invest about Rs 410 crore in ETFs every month

BI India Bureau

Soon you can buy your dream home with your PF—like literally!

BI India Bureau

Labour ministry keen to retain 8.65 pc interest rate on EPF deposits for 2019-20

PTI

Employee Provident Fund interest rate lowered by 15 basis points 8.5%

Navdeep Yadav

Indian pension fund says it won’t lend money to private companies

Katya Naidu

Popular Keywords

Buying Guides

Your provident fund will yield 8.6% interest rate, .2% lower than last year