Bengaluru: The Employees’ Provident Fund Organisation on Monday lowered the interest rate on deposits to 8.65 per cent for fiscal 2016-17 from 8.8 per cent in 2015-16, said a member of its apex board of trustees.
“The Central Board of Trustees (CBT) has take a decision to reduce theAinterest rate on EPFO’s deposits to 8.65 per cent as per the guidelines of the Comptroller Audit General (CAG), which objected to 8.8 per cent interest rate,” CBT member and INTUC Vice President Ashok Singh told IANS after the meeting here.
Admitting that the trade union leaders and cadres were not happy with the board’s decision to lower the interest rate on their savings, Singh said they would appeal to the Finance Ministry to retain the rate given in the last fiscal.
“We have conveyed to the board chairman (Union Labour and Employment Minister Bandaru Dattatreya) our unhappiness on lowering the interest rate by 0.15 per cent, which has been calculated on the basis of the CAG guidelines.
“The CAG has observed that interest earned on the retirement fund (EPF) cannot be considered as income to retain the interest rate on its deposits at 8.8 per cent,” he said.
The retirement fund will recommend the lower interest rate to the finance ministry for notification soon.
The 215th meeting of the CBT was attended by all the trustee members, representing the employees, employers, state government and officials of the Labour and Finance Ministries.
There are 17 crore (170 million) EPF subscribers’ accounts.
The board also adopted the 63rd annual report of the EPFO for fiscal 2015-16.
“Interest income from provident fund investments has been estimated on the basis of interest income received/receivable in this fiscal, including surplus from previous year of Rs 410 crore,” said the ministry in a statement later.
Last fiscal’s income included a surplus from previous year of Rs.1,604 crore.