New Delhi: The Employees Provident Fund Organisation is pressing State Bank of India, one of the four retirement fund managers, to comply with a clause that provides for a penalty for keeping money idle for over a day.
“The matter was discussed during the meeting of Finance and Investment Committee (FIC) meeting last month and EPFO had written to SBI regarding it. But they have not agreed so far to pay penalty interest for keeping funds idle with them for more than one working day,” a source in EPFO, which has over four crore PF subscribers, told PTI.
In case of denial by SBI on the subject, EPFO has the option to replace the Bank, sources said, adding that at the moment no such action is being considered.
Interestingly, this clause is a part of the portfolio agreement signed by all the other three private fund managers appointed by EPFO including Reliance Capital, HSBC AMC and ICICI Prudential AMC five months ago.
The source said, “Now since this matter was again raised by the members of the FIC in its recent meeting held on 10 December, EPFO will have to tighten the noose on SBI to get its nod on the matter as other fund mangers have already agreed to that.”
In a letter to the EPFO in September, SBI had expressed its inability to share income earned on idle funds. Moreover, the letter indicated that SBI had the notion of idle funds being those held up for more than two working days whereas the new agreement redefined that.
Before the appointment of SBI and the three private fund managers, the country’s largest public sector bank was managing PF deposits, which did not adhere to any such clause between SBI and EPFO.
However, SBI always claimed that they would pay interest as per the savings account norms on idle funds. But this matter had already rocked CBT meeting many a time when SBI had failed to keep its promise.