Labour Minister Bandaru Dattatreya today said that the Finance Ministry has approved 8.65 per cent interest rate on EPF for 2016-17. The ratification of the 8.65 per cent on EPF will enable the retirement fund body EPFO to credit this rate of return into the accounts of four crore subscribers.
“Finance Ministry has agreed to 8.65 per cent rate of interest. Now, the communication will come. The formal discussions are over,” the minister said. He further added, “We will immediately issue the notification and credit the rate of interest to over four crore subscribers.”
The Employees’ Provident Fund Organisation trustees had approved 8.65 per cent rate on EPF in December last year. The Finance Ministry has been nudging the Labour Ministry to lower the EPF rate for aligning it with the rates of small savings schemes like PPF.
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Recently the labour minister said, “It is not like that. The CBT (EPFO trustees) had decided to give 8.65 per cent. Our ministry keeps on discussing with Finance Ministry. We would have surplus of Rs 158 crore on providing 8.65 per cent. If need be, I will talk to them (Finance Ministry). I have requested them to approve 8.65 per cent. In any case this amount (interest income) will be given to workers. But how and when it will be provided, this is the question.” The Employees’ Provident Fund Organisation’s (EPFP) apex decision making body the Central Board of Trustees (CBT) had decided to provide 8.65 per cent rate of interest on EPF deposits last December.