New Delhi: Retirement fund body EPFO's trustees' will hold a crucial meeting on Wednesday to decide on the EPF interest rate for 2017-18.
Sources have said that EPFO is likely to retain 8.65 percent interest rate on provident fund deposits for its about 5 crore members for 2017-18.
In order to maintain the 8.65 percent interest this fiscal, the Employees Provident Fund Organisation (EPFO) had sold a portion of its investments in the exchange traded funds (ETF) worth Rs 2,886 crore earlier this month, PTI quoting sources said.
The EPFO had announced this rate on deposits for 2016-17, a tad lower than 8.8 percent in 2015- 16. It has earned a return of Rs 1,054 crore on sale of ETFs this month, which would be sufficient to provide 8.65 percent rate of interest this fiscal, said the sources.
The EPFO has been investing in ETFs since August 2015 and it has so far not monetised the ETF investments. The EPFO has invested around Rs 44,000 crore in the ETFs till date.
According the latest evaluation of the EPFO's investments in ETFs, it has earned a return of 16 percent. However, this return is notional because it could not be realised unless the EPFO liquidates these ETF investments.
Besides, the trustees may also review the proposal to credit the ETFs into the members' EPF account because a large number of members do not have that level of financial literacy.
With PTI Inputs