EPFO to announce interest on deposits; expected to be over 8.5%

The EPFO is likely to decide soon the rate of interest on PF deposits for 2013-14, which is expected to be over 8.5 per cent.

"The Employees' Provident Fund Organisation's (EPFO) apex decision making body, the Central Board of Trustees (CBT), could meet this month to initiate the process for deciding on interest rate on PF deposits for the current fiscal," an EPFO trustee and unionist Virjesh Upadhyay told PTI.

According to him, the trustee meet could not be called as Congress leader Sis Ram Ola who was Labour Minister and Chairman of the CBT was hospitalised for many days. (Ola subsequently expired.)

However, EPFO was ready with its proposal for interest rate and had sought time to convene the CBT meeting.

With Minister of Road Transport and Highways Oscar Fernandes being given additional charge of Ministry of Labour, the CBT meeting could be called soon, Upadhyay said.

"Now it is high time that CBT should meet to reconstitute important sub-committees including Finance and Investment Committee (FIC) which vets the proposals like interest rate and puts them before CBT for final decision," he added.

Since the new CBT has not met after its reconstitution in May this year, no sub-committees could be reconstituted. The term of the sub-committees is co-terminus with the CBT.

An EPFO official said that CBT would have to meet at least twice before deciding interest rate on PF deposits for the current fiscal.

In the first meeting, the trustee would constitute FIC and in the second meeting they would decide on interest ratebased on the recommendations of the committee looking at the proposal.

The proposal for the interest rate is prepared by the EPFO which is vetted by the FIC and goes to CBT for final consideration. Once approved by the CBT, the decision on the interest rate requires concurrence of Finance Ministry which has to notify it.

Only after notification, the interest is credited into the accounts of subscribers.

"The EPFO will not pay less than 8.5 percent interest rate on PF deposits for the current fiscal," another EPFO official recently said.

According to EPFO's income estimates for the current fiscal, the body can even pay interest rate slightly higher than 8.5 per cent for 2013-14.

As per the norms, the EPFO is expected to announce rate of interest on PF deposits before the beginning of a financial year. However, for the past few years, there has been delay in announcement of the rates.

The EPFO had provided 8.5 per cent interest rate for 2012-13, up from 8.25 per cent in 2011-12.