Retirement fund body EPFO on Thursday, 5 March, lowered interest rate on provident fund deposits to 8.5 percent for the current financial year, said Labour Minister Santosh Gangwar.
The EPFO had provided 8.65 percent rate of interest on EPF for 2018-19 to its around six crore subscribers.
The decision was taken at a meeting of the the Employees' Provident Fund Organisation's (EPFO) apex decision making body – the Central Board of Trustee.
"The EPFO has decided to provide 8.5 per ent interest rate on EPF deposits for 2019-20 in the Central Board of Trustees (CBT) meeting today," Gangwar told reporters after the meeting in New Delhi.
Now, the labour ministry requires the finance ministry's concurrence on the matter. Since the Government of India is the guarantor, the finance ministry has to vet the proposal for EPF interest rate to avoid any liability on account of shortfall in the EPFO income for a fiscal.
The finance ministry has been nudging the labour ministry for aligning the EPF interest rate with other small saving schemes run by the government like the public provident fund and post office saving schemes.
The EPFO had provided 8.65 percent rate of interest to its subscribers for 2016-17 and 8.55 percent in 2017-18. The rate of interest was slightly higher at 8.8 percent in 2015-16.
It had given 8.75 percent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 percent for 2012-13.
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