The Employees Provident Fund Organization (EPFO) has determined to scale back the rate of interest to eight.5 per cent for the present monetary 12 months. Union Labor Minister Santosh Gangwar gave the data after the assembly of the Central Board of Trustees (CBT), the apex deciding physique of the EPFO.
Decision in CBT assembly
In the final monetary 12 months 2018-19, EPFO paid 8.65% curiosity to its six crore members. The rate of interest was determined after contemplating the EPFO revenue on the CBT assembly. EPFO pays curiosity on the revenue earned by the members on their deposits.
0.15 p.c discount in rate of interest
Gangwar informed reporters after the assembly that it has been determined within the CBT assembly that EPFO can pay 8.5% curiosity through the present monetary 12 months 2019-20. In this fashion, the curiosity revenue of the members will lower by 0.15 per cent over the earlier 12 months.
Finance Ministry approval must be taken
After this choice, the Ministry of Labor must take the consent of the Finance Ministry. <! –
In this case, the central authorities offers the assure, so the Finance Ministry considers the proposal of EPF rate of interest to make sure the cost of curiosity from the EPFO within the monetary 12 months itself and doesn’t incur any extra legal responsibility on the federal government.
Finance Ministry doesn’t wish to be given a lot curiosity
The Finance Ministry urges the Ministry of Labor to maintain the speed of curiosity of EPF consistent with the rates of interest payable in Government Savings Schemes like Public Provident Fund (PPF) and Post Office Savings Schemes. The Finance Ministry had objected to elevating the rate of interest to eight.65 per cent within the final monetary 12 months 2018-19 and didn’t approve for a number of months. The approval was later granted after the intervention of the Prime Minister's Office.
Paid a lot curiosity in earlier years
The EPFO paid 8.65 per cent curiosity to its members in 2016-17 and eight.55 per cent in 2017-18. The rate of interest was barely greater at 8.Eight per cent in FY 2015-18. The Provident Fund Organization paid 8.75 per cent in 2013-14 and 2014-15 and eight.5 per cent in 2012-13.