Now, EPFO can park funds in CoD, FD

Published: Wednesday, August 8, 2012, 10:46 [IST]

The Central Board of Trustees(CBT), Employees Provident Fund Organisation (EPF0) on Tuesday approved proposal to allow investment in certificate of deposits of state-owned banks to increasing the scope of investment inclusive of the safety of funds.

The organisation allowed the retirement fund body to park its funds in fixed deposits up to five years, short term securities and certificate of deposits (CoD) of public sector banks, as they offer higher returns.

The Central Board of Trustees of EPFO also approved on the proposal of acquisition of 26% of the equity stake in the Reliance Capital Asset Management Limited (RCAML) by Nippon Life Insurance Company, Japan.

The shares of the Reliance Capital touched an intraday high of Rs 368.10 and was seen trading at Rs 363 higher by 0.57% at 10.30 am IST.

"What has been agreed....which again will be recommended to the government and it has to take a view, is that the borrowing in the CBLO is to be permitted, the investment in the CDs of the public sector banks also is to be permitted and and the investment in FDs for more the one year and less than five years is also be permitted," Central Provident Fund Commissioner R C Mishra told reporters after meet, reports PTI.

As per the proposal, the EPFO would be allowed to participate in collateral borrowing lending obligation (CBLO), approved by the the Reserve Bank of India.

This move will provide EPFO more flexibility in investment in the primary options of short term securities by the RBI.

However these approved proposals will have to be cleared by the government before they are implemented.

GoodReturns.in

Story first published: Wednesday, August 8, 2012, 10:46 [IST]