Money & Banking

Finance Ministry rejects EPFO proposal for workers’ bank

PTI Hyderabad | Updated on January 17, 2018 Published on July 20, 2016

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The Ministry of Finance has rejected a proposal for setting up a Workers’ Bank by the Employees’ Provident Fund Organisation (EPFO), according to a senior official of the Labour Ministry.

Earlier, the EPFO had sent proposals to the Finance Ministry seeking permission to start a bank to serve its members.

The EPFO, which has about 3.7 crore subscribers, wanted to set up a bank and the proposal was discussed in the Central Board of Trustees’ (CBT) meeting on December 19, 2014.

CBT is the apex decision-making body of EPFO.

“The bank proposal was rejected by the Ministry of Finance. They are of the opinion that we do not have the necessary competence for running a bank. Some internal discussions are going on in the Ministry. We are trying to come up with answers to satisfy the Finance Ministry’s queries,” the official told PTI on condition of anonymity.

The core idea of setting up the bank is not to make huge profits, but to serve our own members primarily, the official said.

Another senior official of the EPFO said currently it manages funds to the tune of Rs 7.5 lakh crore and another Rs 2.5 lakh crore will be with the organisations of companies who were exempted from depositing PF with EPFO.

Then Labour Secretary Gauri Kumar had earlier said EPFO might not have the core competence to run a Workers’ Bank.

However, the suggestions for such a bank could be referred for the consideration of the Department of Financial Services based on discussions in CBT.

Labour Minister Bandaru Dattatreya had earlier said a committee in CBT is examining the issue to come up with suggestions.

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Published on July 20, 2016
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