After waiting for over six months, over five crore EPF subscribers in the country have a reason to cheer. The finance ministry on Thursday notified a 9.5% interest on Employees' Provident Fund for 2010-11 as decided by a central board of trustees of the provident fund organization in September. But the approval comes with a rider.
The ministry wants all the 4.71 crore accounts of the subscribers to be updated within six months - the accounts of which have not been updated for years.The condition comes in the wake of the ministry's objection to 9.5 interest, a calculation it questioned 'when the EPFO does not know the exact details of the 4.71 crore accounts'.
"Yes, there is this rider which is challenging as we cannot update the records without receiving the returns from the employers," Samirendra Chatterjee, Central Provident Fund Commissioner, told HT.
The ministry also wants a correctional adjustment in the next year's interest rate, in case of a shortfall noticed (after accounts are updated) because of 'the largess' this year.
The EPFO maintained that the Rs 1731 crore, which it is disbursing as higher interest, is from the interest suspense account and is a surplus accumulated from last 59 years.
"The notification vindicated our calculations and stand," Chatterjee said.
"There would not be any such need for a correction." Chatterjee admitted that the finance ministry's stricture would affect the settlement of lakhs of claims (withdrawals) and transfers.
The higher rate of interest snowballed into a major tussle between the ministry of finance and the ministry of labour and employment, under which the EPFO falls.