8.65 per cent interest rate on EPF deposits to be ratified, says Bandaru Dattatreya

Labour Minister Bandaru Dattatreya on Tuesday said 8.65 per cent interest rate on EPF deposits for this fiscal will soon be ratified by the Finance Ministry and there is no difference of opinion on the issue.

“The Labour Ministry and the Finance Ministry (view) is the same. There is no difference on 8.65 per cent rate of interest on EPF. It is in the process and I will pursue it personally,” Dattatreya told PTI.

EPFO’s apex body, Central Board of Trustees (CBT) headed by the Dattatreya had, approved 8.65 per cent rate of interest on EPF deposits for current fiscal on December 19 - lowest in four years.

The Employees’ Provident Fund Organisation had provided 8.8 per cent rate of interest for 2015-16 to its 4 crore contributing subscribers. It maintained 8.75 per cent for 2013-14 and 2014-15 while it was 8.5 per cent in 2012-13.

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EPFO will be left with a surplus of Rs 269 crore after providing 8.65 per cent interest rate for the current fiscal.

The minister’s assurance has come as relief for subscribers as the Finance Ministry has been reportedly asking the Labour Ministry to bring the EPF interest rate in alignment with other small saving schemes like PPF of the government.Earlier last year, the Finance Ministry had lowered interest rate on EPF for 2015-16 to 8.7 per cent from 8.8 per cent approved by the CBT but the step was retracted after protests by trade unions.

As per practice, CBT decision on interest rate can be implemented only after the concurrence of the Finance Ministry.

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EPFO said it has settled 19,114 grievances in January, leaving 2,556 as pending. Of the pending grievances, 2,206 were for less than 7 days.

As a part of next phase of computerisation, EPFO is moving towards a centralised receipt and payment system. EPFO has entered into banking arrangements with multiple banks and it is expected that a centralised system will bring in greater efficiency in a cost-effective way.

Once operationalised, this would also facilitate automation of compilation of financial information as required for compiling the organisational balance sheet and other monitoring reports, it added.