Retirement fund body EPFO has retained 8.5 percent interest rate on employees' provident fund (EPF) for 2019-20 for its over six crore members as decided earlier, and also began crediting the same into their accounts on Thursday.
A large number of the members of the Employees' Provident Fund Organisation (EPFO) would be able to see their updated EPF accounts with credit of 8.5 per cent interest for 2019-20, from Friday, a senior official told PTI.
The official further said the labour ministry has already sent the direction to credit the 8.5 percent interest on EPF for 2019-20 to the EPFO, and the body has already started crediting interest into the members' account for the last financial year. Labour Minister Santosh Gangwar said, "We had said that it would be our endeavour to provide 8.5 per cent interest rate on EPF for 2019-20. We have issued a notification to provide 8.5 per cent rate of interest on EPF for 2019-20. We have also began the process to credit the said rate of interest into subscribers' account." The minister added that he has asked to ensure that all those members who are retiring on December 31 also get 8.5 per cent rate of interest for 2019-20.
The process for capital gains for a payment of 0.35 per cent interest for 2019-20 has also been completed, he added. The EPFO in September 2020 decided to retain 8.5 percent interest rate. But, it had spilt the rate of return into two components of 8.15 percent (from debt income) and 0.35 per cent (from capital gains) from the sale of ETFs (exchange-traded funds), subject to their redemption by December 31, 2020.
The EPFO had earlier planned to liquidate some of its investment in ETFs to provide 8.5 per cent interest for the last financial year. However, it could not do so because of the choppy market conditions amid the lockdown, induced by the COVID-19 pandemic. The official said the market conditions are more than favourable these days.
Earlier in the day, Gangwar approved the 8.5 per cent interest rate for last financial year after receiving the finance ministry's concurrence. Thereafter, the direction was sent to the EPFO for crediting the interest on EPF into the subscribers' accounts.
In March this year, the EPFO's apex decision making body Central Board of Trustees, headed by Gangwar, approved 8.5 per cent interest rate on EPF for 2019-20. In September 2020, the EPFO had decided to split the 8.5 per cent interest rate into two. But, later in December, the ministry decided to credit the entire 8.5 per cent into subscribers' accounts in one go.
(Edited by : Aditi Gautam)