EPFO committee suggests reduction in interest rate

EPFO committee suggests reduction in interest rate


EPFO committee suggests reduction in interest rate
The expectation has been that the labour ministry will bring the interest rate for provident fund deposits in line with other small savings schemes.
BY: ENS ECONOMIC BUREAU | NEW DELHI |
Published On:December 15, 2016 2:13 Am
The Central Board of Trustees of Employees’ Provident Fund Organisation (EPFO), which is headed by labour minister Bandaru Dattatreya, will meet on Monday to decide on the interest rate for the provident fund deposits for the financial year 2016-17.
The finance, investment and audit committee (FIAC) of the EPFO in its meeting on Tuesday discussed the interest rate for provident fund deposits and has suggested at least a 10 basis points reduction in the interest rate for provident fund deposits.
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The expectation has been that the labour ministry will bring the interest rate for provident fund deposits in line with other small savings schemes.
In September, the government had reduced interest rates on small savings schemes by 0.1 per cent for October-December.
Interest rate on Kisan Vikas Patra was brought down to 7.7 per cent from 7.8 per cent, while that for Public Provident Fund was reduced to 8 percent for October-December as against 8.1 percent in the previous quarter.
The interest rate on Sukanya Samriddhi Account Scheme is 8.5 per cent, while that on term deposits is 7-7.8 per cent.
Earlier this year, the finance ministry had approved a lower employees’ provident fund (EPF) rate of 8.70 per cent for 2015-16, after the labour ministry had announced 8.80 per cent rate of interest. After several protests by trade unions, however, the finance ministry reverted to the initially announced 8.8 per cent interest rate for 2015-16.