The Employees’ Provident Fund Organisation (EPFO) may hand out more interest on provident fund (PF) deposits for the current fiscal, compared to the 8.75% offered in the past two years.
The retirement body is expected to give 9% for it’s over-5-crore subscribers for the 2015-16 fiscal.
“The income projection of Rs 34,844.42 crore for the current fiscal is expected to be revised upward. Thus, the body can provide 9% rate of interest on PF deposits for 2015-16,” EPFO trustee and Bharatiya Mazdoor Sangh Secretary P J Banasure told Press Trust of India.
Earlier this week, the Employees Provident Fund Organisation’s (EPFO) Finance Audit and Investment committee (FAIC) had recommended 8.95% interest on PF deposits for the current fiscal year.
“If the EPFO provides 8.95% interest rate on PF deposits for 2015-16, it will leave a surplus of Rs 91 crore as per income projections worked out in September last year. But the FAIC will meet again later this month to vet the latest income estimate which is likely to be revised upward,” said Banasure, who is also a member of the FAIC.
Offering 9% interest on deposits will lead to a deficit of Rs 100 crore for the EPFO, according to its income projections made in September last year.
“We are expecting that there will be a surplus of Rs 100 crore on providing 9% rate of interest on PF deposits when EPFO will work out the latest estimates. The FAIC can change its recommendation in the next meeting and suggest 9% interest rate for 2015-16,” he said.
However, the proposal to pay 9% interest needs to be approved by the Central Board of Trustees (CBT) before the Finance Ministry notifies it.
Recently, the Finance Ministry indicated it would cut interest rates on small savings like public provident fund, taking into account the rate cuts announced by the Reserve Bank of India (RBI).