EPFO to increase exposure to PSUs

Not to invest in LICHF till the probe report is out.

The Central Board of Trustees of the Employees Provident Fund Board has decided to increase the fund’s exposure to public financial institutions and public sector undertakings (PSUs) by approving expansion of investment limits in terms of net worth.

In its meeting on Thursday, it decided to raise the investment limit for dual ‘AAA’ rated PSUs from 40 per cent to 50 per cent of net worth. In case of ‘AA+ and AA rated’ public financial institutions, the limit has been raised to 40 per cent from 25 per cent of the net worth.

The decision would augment the yield on such investments in future.

The board also decided to defer further investment in LIC Housing Finance till the probe into the company not following prudent exposure norms and due diligence in extending advances to real estate companies is completed.

Speaking after the meeting, Minister for Labour and Employment Mallikarjun Kharge said the organisation would not invest till the inquiry was on. LIC Housing Finance is a subsidiary of Life Insurance Corporation of India, the largest insurance company in India.

Till date, EPFO has invested Rs 454 crore in the company’s bonds, while norms allow an investment of up to Rs 846 crore.

Last month, CBI arrested CEO Ramachandran Nair and seven senior bankers for allegedly colluding with real estate companies to sanction large corporate loans by overriding mandatory conditions for such approvals, along with other irregularities.

To get higher yield through higher interest and capital gains, the board allowed shifting of investment from bonds issued by India Infrastructure Finance Company Limited to state development loans as a one-time measure.

The board also took note of the progress report of the ongoing computerisation programe in the organisation. This would improve the service for faster credit of refund to members’ bank accounts. An e-challan facility has been introduced for depositing contributions and returns by employers on a pilot basis in some offices. It will be introduced in all offices gradually.

Minister of State for Labour and Employment and vice-chairman of the board of trustees, Harish Rawat, Labour Secretary P.C.Chaturvedi and Central Provident Fund Commissioner Samirendra Chatterjee were also present at the meeting.