Good news for EPFO subscribers! Money will soon be credited in your bank account

In what comes as good news for the subscribers of Employees' Provident Fund (EPF), retirement fund body EPFO on Wednesday decided to credit a part of 8.5 per cent interest on EPF for 2019-20 into the account of its around 6 crore subscribers. The decision to provide 8.15 per cent interest now on EPF has been taken at the Employees' Provident Fund Organisation's (EPFO) trustees meet held on Wednesday. 

The remaining 0.35 per cent rate of interest on EPF for 2019-20 would be credited into the subscribers account in December this year. The EPFO had earlier planned to liquidate some of its investment in exchange traded funds to meet the deficit for providing 8.5 per cent interest for the last fiscal. 

However, it could not do so because of the choppy market conditions amid lockdown induced by COVID-19. 

The EPFO's apex decision making body Central Board of Trustees (CBT) will meet again in December and take a call on crediting remaining 0.35 per cent interest into subscribers account. The issue was not listed on the agenda. However, some trustees raised the issue of delay in crediting interest into subscribers' account. 

The board headed by Labour Minister Santosh Gangwar had decided to provide 8.5 per cent interest rate for 2019-20 in its meeting held in March this year. 

Divya Baweja, Partner, Deloitte India believes that while 8.5 per cent interest rate is a welcome move, it will not be easy to meet for companies that have private trusts. 

“The rate of interest of 8.5% announced by the Central Board of Trustees surely will provide a cheer to the common man and is a welcome move from the perspective of individual members. However, meeting such a rate could pose a challenge for companies having Private PF Trusts who may not be able to generate adequate returns to meet this rate of interest especially given the covid times,” he said.