Retirement fund body Employees' Provident Fund Organisation (EPFO) is likely to credit 8.5 percent rate of interest for 2019-20 in the EPF accounts of around six crore subscribers in one go by the end of December, as per the report.
Earlier in September this year, the EPFO had decided to split 8.5 pc interest into two instalments of 8.15 pc and 0.35 pc in its trustees meet headed by Labour Minister Santosh Gangwar. According to the source info, the Labour Ministry has sent a proposal to the Finance Ministry to give concurrence to credit 8.5 pc rate of interest on EPF for 2019-20 earlier this month. "The Ministry of Finance ratification is likely in a few days. Thus the interest is likely to be credited by this month only."
The source further said that earlier the Ministry of Finance had sought some clarifications on the rate of interest for the last fiscal, which were duly addressed. In March this year, the EPFO's apex decision making body Central Board of Trustees headed by Labour Minister Santosh Gangwar had approved 8.5 pc interest rate on EPF for 2019-20. In a virtual CBT meeting in September, the EPFO had decided to honour its commitment to provide 8.5 pc rate of interest for the last fiscal. But the CBT had also decided to split the rate of interest into two instalments of 8.15 pc and 0.35 pc in view of the pandemic.
The labour ministry had then explained that "in view of exceptional circumstances arising out of COVID-19, the agenda regarding interest rate was reviewed by the CBT and it recommended the same rate of 8.50 pc to the Central Government. "It (8.5 pc interest) would comprise of 8.15 pc from debt income and balance 0.35 pc (capital gain) from the sale of ETFs (exchange-traded funds) subject to their redemption by 31st December 2020," it had said.
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