Amidst features like fintech tools and automated payouts, the interest money coming late to the EPFO subscriber’s account by almost six months is shocking.
Good news has come before Diwali for more than 6 crore subscribers of EPFO. The Finance Ministry has ratified the interest rate to 8.5 percent. The CBT of EPFO had given its permission in March. Now for the financial year 2021-22, the interest money will come into the account of the subscribers.
The question is, why does the EPF interest money get delayed every year in the subscribers’ account? You will see many complaints related to this on the timeline of EPFO’s Twitter handle. Today, it is shocking to see the interest money coming in the subscriber’s account almost six months late between fintech tools and automated payouts.
The biggest reason for this is the lengthy bureaucratic process and time-consuming paperwork. A meeting of the Central Board of Trustees is held in March to announce the interest rate for the financial year. The proposal is then sent to the Finance Ministry. After getting the approval, the labor ministry notifies the interest rate. After that the process of adding interest money to the subscribers’ account starts.
A finance ministry official told Moneycontrol, “The reason for the delay in rating this year is because the labor ministry has delayed forwarding the documents to us.” Prashant Singh, Vice President, TeamLease Services, said, “The central government needs huge funds to transfer money to EPF accounts. The finance ministry in this regard validates the data as well as allocates the funds. After that, the accounts of the subscribers are allocated. I have credit for money.”
Crediting money to India Post’s Small Savings Accounts is not very difficult. These include Savings, Senior Citizens Saving Scheme, Sukanya Samriddhi Account, PPF etc. The Finance Ministry approves the interest rate for every quarter every year. After that the money is credited without any delay.
Preeti Chandrashekhar, Business Leader, Mercer India, said, “Not much information is available about the reason for the delay. One reason could be the delay in the documents being sent by the labor ministry to the finance ministry, as the EPF payment is due to other savings. Much more so than the scheme.”
Many employees keep expressing unhappiness over the delay in interest payment. There is only one response from the EPFO handle, “Whenever the interest is credited, the accumulated full payment will be done. There will be no loss to the interest money.”
Amol Joshi, Founder, PlanRupee Financial Services said, “There should be no delay in today’s time. There are crores of accounts in the banking system, but everyone gets interest payment on time. If all the entities complete the process quickly, then EPFO would be Might as well pay soon.”
