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For the next three months, State Bank of India alone will manage the Rs 3.5 lakh crore funds with the Employees Provident Fund Organisation (EPFO). The interim arrangement was announced after the Central Board of Trustees (CBT) of the EPFO turned down the proposal to extend the tenure of the three existing private fund managers — ICICI Pru, HSBC and Reliance Capital, whose term was to expire on March 31.
“SBI alone will manage the entire retirement fund for the interim period of three months beginning April 1,” the Labour Minister, Mr Mallikarjun Kharge, said after the meeting on Wednesday.
EPFO had engaged private fund mangers for the first time in July 2008. The three were managing close to Rs 3 lakh crore of the total corpus, much to the chagrin of trade unions which saw this as a move to use “workers' money for private speculative interests”. Prior to that, SBI alone used to manage the fund.
“The decision not to extend the tenure of these three private fund managers was almost unanimous,” said Mr Dipankar Mukherjee of the Centre of Indian Trade Unions.
New fund managers
The names of the new fund managers were to be announced on April 1, but in the backdrop of the scams that have hit the UPA government, the process is taking time. Sources said that EPFO had sent the short-listed tender documents to the Central Vigilance Commission for vetting.
According to sources, 11 asset management companies were keen to manage the massive EPFO corpus, which adds incremental deposits of about Rs 30,000 crore a year to its kitty.
Seven new private fund managers, such as Kotak Securities, Securities Trading Corporation of India, UTI Securities and ICICI Securities, too, had expressed their keenness to manage the retirement fund, sources said.
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