The retirement fund body Employee Provident Fund Organisation (EPFO) on Tuesday slightly increased the interest rate to 8.15 per cent on the employees' provident fund for 2022-23.
The decision was taken by EPFO's board of trustees. Last year, EPFO had declared 8.1 per cent as the rate of interest for 2021-22, which was the lowest in 40 years. The last time the interest rate had slipped to 8 per cent was in 1977-78.
Subsequent to the CBT decision, the interest rate on EPF deposits for 2022-23 will be sent to the finance ministry.
The CBT, which is chaired by the Union Labour Minister and includes representatives from both the business and employee sides, determines the interest rate proposal. The Finance Ministry then confirms the recommendation.
In March 2020, EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent provided for 2018-19.
The EPFO kept the interest rate on PF deposits at 8.5 percent for 2020-21, the same as in 2019-20, despite significant withdrawals as a result of Covid's impact on people's financial resources.
Following the Covid-19 pandemic, the retirement fund body faced large withdrawals and lesser contributions. The EPFO had cleared 56.79 lakh claims worth Rs 14,310.21 crore under the advance facility as of December 31, 2021.
