New Delhi: Retirement fund body EPFO is likely to announce the interest rate on PF deposits for this fiscal at its trustee meeting slated for next month.
The Employees Provident Fund Organisation (EPFO) had lowered the rate of return for its over 4.5 crore subscribers to 8.65% for 2016-17, from 8.8% in 2015-16.
“After discussing in the Central Board of Trustees meeting, my ministry will take a decision. I am going to call a meeting shortly. The meeting will happen next month," labour minister Bandaru Dattatreya told reporters when asked about the decision on EPF interest rate for this fiscal.
The minister further said, “Last time, I gave 8.65% and this year, our rate of return has come 13.3% on equity investments. The CBT will propose a rate of interest based on income projection for this fiscal. Then, as its chairman, we will take the decision."
There is a buzz that the interest rate on EPF can be further lowered by around 25 basis points, or 0.25 percentage point, for the current fiscal from 8.65% for 2016-17 in view of a falling yield on securities or bonds where the body invests bulk of its funds.
Yesterday, however, the minister had said the EPFO was in the process of working out income projections for the current fiscal which would then become the basis for fixing the rate of return for 2017-18.
A member of the EPFO’s advisory body Finance Investment and Audit Committee (FAIC) has also confirmed that the panel is likely to deliberate on the proposal next month.
As per practice, the FAIC firms up the proposal on interest rate and places it before the CBT for approval. Once approved by the CBT, concurrence is sought from the finance ministry before the figure is made public.
The ministry has been pitching for aligning EPF interest rate with that of small savings rates administered by it. The interest on small saving schemes like PPF has been reduced by 10 basis points, or 0.10 percentage point, for the July-September quarter.