The Employees Provident Fund Office’s (EPFO) Central Board of Trustees (CBT) established the provident fund’s interest rate for the financial year (FY) 2023-24 at 8.15%.
The CBT’s 233rd conference, which was presided over by Union Minister for Labour and Employment and Environment, Forestry, and Climate Change Bhupendra Yadav, was conducted on Tuesday, March 28th, in New Delhi.
The CBT suggested adding safeguards to the sum that balanced the increase and surplus funds. As per the CBT, the suggested 8.15% interest rate protects the surplus and ensures higher member revenue. The excess of Rs 6.64bn and the interest rate, both at 8.15%, are greater this FY vis-Ã -vis the last one.
On a total capital sum of approximately Rs 11 trillion, which was Rs 774.25bn and Rs 9.56 trillion, respectively, in FY 2021-22, the Board’s proposal calls for allocation of more than Rs 900bn to the members’ accounts. The amount of money that is suggested for distribution is the largest yet. In comparison to FY 2021–22, the increase in revenue and principal is greater than 16% and 15%, respectively.
The CBT ruling from Tuesday has an impact on about 60m registered EPFO members.
The EPFO announced an interest rate of 8.1% for 2021–2022, which was the lowest in 40 years. In the years 1977–1978, the interest rate last dropped to 8%.
For FY23, the EPF return rate was predicted to be around 8%. Union Finance Minister Nirmala Sitharaman has approved the CBT’s recommendation for an 8.1% interest rate, which was made in March of last year. The EPFO had an anticipated Rs 4.5bn in excess as a result, which suggested that the rates would remain within the same range.
Many EPFO users encountered an interest credit wait in 2022. Additionally, it was the first year that the Union Budget had suggested charging interest on increased EPF payments.