SBI to manage EPFO's Rs 3 lakh crore fund

Retirement fund body EPFO on Wednesday said its corpus of about Rs 3.5 lakh crore will now be managed only by one of the existing fund manger, SBI, for a three month period ending June 30 as an interim arrangement.

In its trustees meet here, the body turned down the proposal to give three month extension to its other existing fund managers - ICICI Pru, HSBC and Reliance Capital. These three private players were earlier managing bulk of the fund - close to Rs 3 lakh crore - of the total corpus.

"The EPFO's apex decision making body Central Board of Trustees has decided that SBI alone will manage the entire retirement fund for the interim period of three months beginning April 1," Labour Minister Mallikarjun Kharge said.

The term of the four fund mangers was to expire on March 31. The EPFO had planned to appoint new fund managers for next three financial years beginning April 1.

The CBT headed by the Union Labour Minister came to this interim arrangement as EPFO is yet to complete the process of appointing new fund managers.

EPFO had started the process last year after it engaged credit rating agency CRISIL for appointing and later monitoring the performance of new fund managers.

As many as 11 Asset Management Companies (AMCs) have evinced interest to manage EPFO's huge corpus which receives incremental deposits of about Rs 30,000 crore (Rs 300 billion) every year.

Besides existing AMCs managing EPFO corpus, seven new firms, including Kotak Securities, Securities Trading Corporation of India, UTI Securities and ICICI Securities have expressed interest to manage the retirement fund.

In order to avoid any controversy amidst the recent outbreak of scams, EPFO had sent its tender document to Central Vigilance Commission (CVC) for vetting.

EPFO had engaged private fund mangers for the first time in July 2008. Prior to that SBI alone used to manage the fund.