The Employees’ Provident Fund Organisation (EPFO) has reduced the interest rate on the employee provident fund to 8.50 per cent for the ongoing financial year 2019-20, down from 8.65 per cent in the previous fiscal, news agency PTI reported citing Labour Minister Santosh Gangwar.
The decision was taken during a meeting of the EPFO’s apex decision making body which is called the Central Board of Trustees (CBT). The retirement fund body has over 6 crores of active subscribers.
“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,” the minister told reporters after the meeting.
The recommendation of the CBT regarding the EPF interest rate cut will now require the finance ministry’s approval. 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 EPFO to reduce its rates over the last few years, in line with the overall lower rate regime and aligning it with other government-run small saving schemes such as the public provident fund (PPF) and post office saving schemes.
The EPFO had provided an interest rate of 8.65 per cent rate to its subscribers for 2016-17 and 8.55 per cent in 2017-18. The interest rate was at 8.8 per cent in 2015-16. the retirement fund body had given 8.75 per cent in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13.
(with PTI inputs)
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