New Delhi: Employees' Provident Fund Organization (EPFO) can reduce the interest rates of PF by 8.65 percent. EPFO is expected to reduce interest rates by 15 to 25 basis points. If this happens, it will directly affect more than 8 crore shareholders of EPFO. For the employed people, PF is a big way of safeguarding the future and due to the lower interest rate, they will be directly affected.
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According to the news agency Mint, the Union Finance Ministry is concerned that it will not be possible for banks to pay attractive interest rates if they give higher returns on PF, which will affect the economy. The report states that in 2018-19, the Retirement Fund Manager fixed a rate of 8.65 percent for its clients after seven months of consultations with the Union Finance Ministry.
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Banks also argue that due to small savings schemes like PF and high-interest rates from EPFO, people will not want to deposit money with them, which will increase their problems in raising funds. An official has said that the retirement fund manager can announce the annual rate of interest by the end of January after a series of meetings of his investment officers, executive committee members and the Central Board of Trustees (CBT).
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