Bengaluru : Interest on provident fund deposits was on Monday lowered to 8.65 per cent for the current fiscal, from 8.8 per cent in 2015-16, by retirement fund body EPFO, citing lower surplus.
“We have decided the interest for EPF subscribers at 8.65 per cent for 2016-17. The decision was arrived at after detailed consultations with all stakeholders. With consensus we have taken this decision,” Union Minister of State for Labour and Employment Bandaru Dattatreya told reporters here.
[alert type=”e.g. warning, danger, success, info” title=””] “We have decided the interest for EPF subscribers at 8.65 per cent for 2016-17. The decision was
arrived at after detailed consultations with all stakeholders. With consensus we have taken this decision,” – Bandaru Dattatreya/ Union Minister of State for Labour and Employment [/alert]
After the 215th meeting of EPFO’s apex decision making body, the Central Board of Trustees (CBT), he said: “In spite of giving 8.65 per cent interest rate, we have surplus of Rs 269 crores.” Interest rate of 8. 8 per cent was provided in 2015-16, reports PTI. Interest income from PF investments for 2016-17 has been estimated mainly on the basis of interest income received or receivable in this financial year, including surplus from previous year of Rs 410 crore, officials said. “Last year, the interest rate decided was at 8.8 per cent. At that time, along with the income of EPFO, the surplus from the previous year was Rs 1,600 crore. This year, along with the income, the surplus available is Rs 410 crore,” Central Provident Fund Commissioner V P Joy said on the reduction in interest rate.
As the surplus has come down compared to the previous year, interest has been reduced by 0.15 per cent compared to last year, he said, adding that “if we had declared more interest rate this year, surplus from this year for next year would have been less”.
Announcing the interest rate cut, Dattatreya, who is the CBT Chairman, said that while the total accounts in the Employees Provident Fund Organisation are 17.85 crore, EPFO’s trust corpus as on 31 March 2016 is Rs 7.48 lakh crore.
He said that despite reduction, EPF paid the highest rate among others like Public Provident Fund (PPF), where the interest rate is 8.1 per cent; General Provident Fund (GPF), 8 per cent and post office term deposits that start from 7.10 per cent for one year.
