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| EPFO may retain 8.5% interest on PF deposits |
| Press Trust of India / New Delhi Jun 17, 2009, 16:03 IST |
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Falling bank deposit rates may not bring bad news for the provident fund depositors as the Employees' Provident Fund Organisation (EPFO) is likely to recommend 8.5 per cent interest rate for 2009-10, the same that depositors received in the previous fiscal.
"The Employees' Provident Fund Organisation (EPFO) is in a position to maintain 8.5 per cent interest rate for 2009-10. The Central Board of Trustee (advisory body) is likely to take a call on the matter next month," an EPFO source said.
At present, there are about 4.49 crore provident fund subscribers and they have been receiving 8.5 per cent interest on their deposits since 2005-06.
With banks reducing deposit rates, an eight to 10 years fixed deposit in State Bank of India will currently yield an interest of 8 per cent only.
Even after paying an interest of 8.5 per cent, sources said, "the EPFO would have a surplus of Rs 6.4 crore during 2009-10." The organisation is expected to earn an income of Rs 12,994 crore in 2009-10.
However, it may not be possible for the EPFO to pay 8.75 per cent interest in the current fiscal as higher rate would result in a deficit of Rs 366.77 crore. At 9 per cent, the losses would further mount to Rs 739.94 crore, he added.
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