Hyderabad: The government is all set to issue a notification authorising retirement fund body Employees’ Provident Fund Organisation (EPFO) to pay 8.8% interest to “inoperative” accounts, Union labour minister Bandaru Dattatreya said on Monday.
“The inoperative Employee Provident Fund (EPF) accounts are not being paid interest since 2011. As per the instructions given by Prime Minister Narendra Modi and finance minister Arun Jaitley, we decided to start paying interest to those accounts to make them operative,” Dattatreya said.
“I have already signed the file concerned. Notification will be issued soon. We will pay 8.8% interest on those accounts. About 97 million workers or employees will benefit from this notification. This is a Diwali gift for the people. We will issue notification within a week,” the minister said.
Dattatreya further said officials have identified that about Rs42,000 crore is now lying in “inoperative accounts” across the country. “We are in the process of identifying multiple accounts held by individuals. Once that is completed we will start distributing the interest to those accounts,” Dattatreya said.
“People can park their funds in EPF as long they want. Since the inoperative accounts are getting interest, people may not like to withdraw. It is a safe investment also. If not today, tomorrow we will have to pay to the claimant. So there is nothing called unclaimed,” a senior official of the ministry had earlier said. In case of EPF, if there is no contribution paid during the last 36 months, then that account is classified as “inoperative”, the official said.
On structuring the EPFO, he said as the government is on the task to increase social security scheme to all the sectors, there is a necessity to increase the EPFO network also. “The current zonal system will be further enhanced so that the reach is high. There is a chance that every state will get a zonal office,” the minister said.
According to Dattatreya, there will be a review meeting on EPFO on Tuesday which will discuss the issue in detail. He said the next meeting of the board of trustees will discuss on the issues of restructuring of EPFO and investments in exchange traded funds, among others.