With uncertainty prevailing over the rates of Employees Provident Fund, CPI(M)-backed trade union, Centre for Indian Trade Unions, said on Friday that it would oppose any move to keep differential interest rates for the Employees Provident Fund subscribers saying "we will not allow any discrimination".
Instead, CITU suggested that EPFO Board should park funds with the Reserve Bank of India for offering higher returns to EPF subscribers and noted that the central bank offered as high as 9.5 per cent for its provident fund subscribers.
"There cannot be any discrimination and we will certainly oppose it," CITU secretary W R Varadharajan told PTI when asked if there would be differential EPF rates as reported by a section of media.
Both Varadharajan and BMS president Hasubhai Dave said there was no proposal of differential EPF rates at the last week's meeting of the Central Board of Trustees of EPFO, which deferred a decision on interest to be paid for its 3 crore (30 million) subscribers during this year.
Stressing that differential rates would not serve the purpose since it would only discourage savings, CITU said the idea was floated in view of EPFO's contention that about 85 per cent of its subscribers have less than Rs 4,000 in their accounts and any increase in interest would only help the large accounts.
With the next CBT meeting on July 13, CITU reiterated its demand for restoration of 12 per cent EPF interest, saying it was one of the ways to provide social security in the country.
"Let RBI keep the (EPFO's) money in proforma account and let the bankers' bank decide on the formula to pay higher real rate of interest taking into account inflation so that we have a transparent mechanism," he said.
