New Delhi: The Employees’ Provident Fund Organisation (EPFO) is among the major public social security organisations in the world. Having over 65 million members, the EPFO managed assets worth Rs 15.7 lakh crore last year. But is there a delay in the credit if interest after it is decided for a financial year?
According to the Ministry of Finance, there is no loss of interest for any member.
Chairman of Aarin Capital and ex-Infosys director Mohandas Pai on Wednesday asked Prime Minister Narendra Modi to bring in reforms quoting a news report titled – Dear EPFO, where is my interest? The article claimed that “over the years, there has been a long time lag between the time EPFO’s Board of Trustees decides on the rate of interest for the financial year and the time the interest actually gets credited to the accounts of the members.”
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Citing the same, Pai questioned, “Why should citizens suffer because of bureaucratic inefficiency?” and sough Finance Ministry, FM Nirmala Sitharaman, DPIIT India’s intervention as he also tagged economist Sanjeev Sanyal in his tweet.
Quelling concerns about the same, the Ministry of Finance responded to Pai’s tweet stating, “There is no loss of interest for any subscriber.” It explained that the interest is being credited in the accounts of all EPF subscribers.
However, that is not visible in the statements in view of a software upgrade being implemented by EPFO to account for change in the tax incidence. For all outgoing subscribers seeking settlement and for subscribers seeking withdrawal, the payments are being done inclusive of the interest, the ministry noted.
While thanking the Finance Ministry for responding to his concerns, Pai asked: “But can you explain why the interest credit is very delayed every year? EPFO accounts are fully electronic! Why cannot interest be credited within 30 days after year end.”
“How is payment done to a subscriber retiring in May if interest is not credited for March end? Paid later?” he inquired in another tweet.
The EPFO board had approved an 8.5 per cent interest rate for EPF members in March 2021. While the EPFO notified the same in October 2021, the interest rate was credited to the members’ accounts in December 2021, according to the report.
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Meanwhile, the Central government, in June this year, approved the reduced interest rate of 8.1 per cent on EPF deposits for the year 2021-22.
