EPFOs can park funds in FDs

EPFOs can park funds in FDs

The Central Board of Trustees (CBT), the apex body of Employees’ Provident Fund Organisation (EPFO), on Tuesday allowed the retirement fund body to park its funds in fixed deposits up to five years, short term securities and certificate of deposits (CoD) of public sector banks.

This was approved at the CBT’s meeting held here. However, these proposals will require prior approval from the government.

The Employees’ Provident Fund Organisation  has a corpus of Rs 3.5 lakh crore and wanted to increase its returns on investments to provide higher rate of interest to subscribers.

“What has been agreed....which again will be recommended to the government and it has to take a view on, is that the borrowing in the collateral borrowing lending obligation is to be permitted, the investment in the certificate of deposits of the public sector banks also is to be permitted and the investment in fixed deposits for more than one year and less than five years is also to be permitted,” Central Provident Fund Commissioner R C Mishra told reporters after the meeting .

The Employees’ Provident Fund Organisation  would be allowed to participate in collateral borrowing lending obligation, approved by the Reserve Bank of India.

It will allow Employees’ Provident Fund Organisation  flexibility in investment in the primary options of short term securities by the Reserve Bank of India.

The meeting also gave its nod to the sale of 26 per cent stake by Reliance Capital Asset Management Company to Japan’s Nippon Life insurance group.

“At today’s meeting, the proposal of Reliance Capital Asset Management has been approved,” Employees’ Provident Fund Organisation trustee and Hind Mazdoor Sabha (HMS) secretary A D Nagpal said. The meeting was chaired by Labour Minister Mallikarjuna Kharge.

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