Skip to main content

EPFO raises interim interest rate to 8.8per

By
The Employees’ Provident Fund Organisation (EPFO) on Tuesday marginally raised the interest rate by 0.05 percentage points to 8.8 per cent for 2015- 16, benefiting its 50- million subscribers’ safety net and yet leaving a surplus of ? 673 crore with itself. However, the interest rate could be revised upwards later.
The decision was taken at a meeting of the Central Board of Trustees ( CBT) chaired by Union labour minister Bandaru Dattatreya in Chennai.
Dattatreya said the decision on interest rate was an interim one, leaving the doors open for further revision of the interest rate for the current financial year in the wake of trade unions’ demand for 8.95 per cent.
According to preliminary estimates, with an interest rate of 8.8 per cent, the surplus would be around Rs. 673 crore.
“We want to safeguard workers’ interest; we want to give a real and purposeful picture before the workers, and that is why a long debate took place today ( on Tuesday),” said Datttreya, adding: “ We will revisit the interest rates based on revised estimates.” EPFO had kept the rate unchanged at 8.75 percent for the past two financial years.
According to trade unions, EPFO can afford to raise the rate to 8.95 per cent.
“This is not up to our expectation.
We strictly oppose this and have conveyed our opposition to the chairman. The minister said the rate was an interim interest rate. This is a new procedure,” said Prabhakar JBanasure, secretary of the Bharatiya Mazdoor Sangh, who attended the meeting.
“The chairman said the market is going down and hence higher rate cannot be recommended now,” Banasure added, saying the issue would come up again in the next meeting.
Earlier, the financial audit and investment committee (FIAC) had suggested a rate of 8.95 percent for FY16. The committee comprising representatives of employees, employers and the government, projected that EPFO would earn Rs. 34,844 crore in 2015- 16, which would be sufficient to offer an interest rate of 8.95 per cent.
Business Standard, New Delhi, 17th February 2016

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Healthy balance sheets augur well for economy: RBI Governor Sanjay Malhotra

By
  Large tariffs by the United States administration and elevated geopolitical risk have increased near-term global financial stability risks, and along with weather events pose downside risks to domestic growth, Reserve Bank of India(RBI) Governor Sanjay Malhotra said in the foreword to the Financial Stability Report released today.Noting that domestic growth momentum is buoyed by strong domestic drivers, sound macroeconomic fundamentals and prudent policies, Malhotra said: “External spillovers and weather-related events could pose downside risks to growth.”On the other hand, he said the outlook for inflation is benign, and there is greater confidence in the durable alignment of inflation with the Reserve Bank’s target.Commenting that the structural shifts reshaping the global economy are making policy intervention challenging, the Governor emphasised the need for central banks and financial sector regulators to remain vigilant, prudent and agile in safeguarding their economies and...
Post a Comment
Read more