- Inflation may fall to 5.2 pc next fiscal on normal rains, ease in supplies: RBI report
- Flipkart Big Dussehra Sale 2022 announced: Check date, discounts, cashbacks, easy EMI options and more
- Stock Market next week: Geopolitical situation, US macro numbers, auto sales data among key triggers for holiday-shortened week
- FPIs turn net sellers again; withdraw Rs 7,600 cr from equities in September
- Suzlon Energy chairman Tulsi Tanti passes away at 64
EPFO approves proposal to credit ETF units to PF accounts
Retirement fund body EPFO today approved a proposal for crediting exchange traded fund (ETF) units to provident fund accounts of its 4.5 crore members.
Employees' Provident Fund Organisation (EPFO) subscribers would be able to see ETF units in their PF accounts by March- end next year.
EPFO's apex decision making body Central Board of Trustee (CBT) has approved an accounting policy for valuation and accounting of equity investments which was prepared in consultancy with IIM Bangalore, Labour Minister Santosh Gangwar told reporters after trustees' meet here.
Gangwar, who also heads the CBT, said the observations of the Comptroller and Auditor General (CAG) were also incorporated in the accounting policy.
Asked about when the retirement fund body will start crediting ETF units to the PF accounts of its subscribers, EPFO's Central Provident Fund Commissioner said it would be possible by March-end this fiscal.
Labour Secretary M Sathiyavathy told reporters that whenever the subscribers take advance or settle their PF accounts, the ETF units would be liquidated by EPFO.
Asked how the PF account would be different from demat account after crediting ETF units, she explained that the subscriber cannot do trading in this case and EPFO would liquidate the ETF units only when members apply for withdrawals.
EPFO had started investing its funds in ETFs in August 2015.
"EPFO has invested around Rs 32,000 crore so far in the ETFs. The return on investment so far is 21.87 per cent. But this is notional because the EPFO would get this return only when it would liquidate this investment," the Labour Secretary explained.
Gangwar added that the board also approved a proposal for centralised payment system for EPFO using National Payments Corporation of India (NPCI) platform, which would not only reduce transaction charges but also bring more convenience.
He said the present decentralised system of the EPFO for making payment to its beneficiaries involves higher cost of transactions, delays in recredits in case of failed transaction and does not provide for Aadhaar-enabled payments.
The new system would enable EPFO to transfer funds on same day to the beneficiaries through NPCI platform. Moreover, EPFO may reconcile the transaction status on T+0 basis (day of transaction plus zero days).
This will result in early recredit in the accounts of beneficiaries in case of failed transactions. It will also have the facility of Aadhaar-enabled transfer of funds.
The minister also told reporters that he along with the EPFO officials would hear the various issues related to pensioners next month.
He said a meeting is scheduled on December 15, 2017 for the purpose.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.