The retirement fund body EPFO will appoint the multiple asset management companies by August 31 to manage its huge corpus of over Rs 3.5 lakh crore but till then, SBI would continue to be its sole fund manager.
EPFO had to appoint multiple AMCs by June 30, so that the newly appointed managers could take over its fund by July 1 for a three years period as desired by its apex decision making body Central Board of Trustees (CBT) headed by the Labour Minister.
"It is proposed that the time line for selection of fund managers be extended by another two months to August 31, 2011 or till the selection whichever is earlier," as per the EPFO proposal listed in the agenda of the CBT meeting scheduled on June 24.
"It is also proposed that till the appointment of new fund managers, State Bank of India (SBI) may be allowed to continue as the fund manager of EPFO corpus," it further said.
EPFO has already missed a deadline of March 31 this year, the day on which the term of four fund managers including ICICI Pru, HSBC AMC, Reliance Capital and SBI expired. It had planned to appoint new fund managers for next three financial years beginning April 1.
Since EPFO could not appoint new AMCs well in time, the CBT in its meeting on March 30 this year, decided that SBI would manage its entire corpus for a three month period ending June 30 as an interim arrangement.
On June 6, giving reasonable time for submitting technical and financial bids, EPFO had asked the 10 AMCs who had earlier evinced interest in managing its funds, to meet June 24 deadline for the purpose.
While the technical bids would be opened on June 24, the financial tenders would be opened on July 8. Therefore, the appointment of AMCs by EPFO is not possible by this month-end.
Besides, four AMCs who had managed EPFO corpus, seven new firms, including Kotak Securities, Securities Trading Corporation of India, UTI Securities and ICICI Securities, have expressed interest in managing the retirement fund.
EPFO had appointed the four multiple fund managers for the first time in July, 2008 with an objective of providing better rate of return on deposits to its 4.72 crore subscribers.
Prior to this, SBI was the sole fund manager for it since its inception in 1952.