Agreeing to a partial rollover of the interest rate, the Central Board of Trustees of the Employees Provident Fund Organisation on Friday asked the Industrial Finance Corporation of India to pay 10 per cent on bonds issued by it for the next 10 years, starting from this fiscal.
"IFCI will have to pay at 10 per cent for the next 10 years, till 2013. Up to March this year, IFCI will have to pay the agreed coupon rate ranging from 12 to 14 per cent," Labour Minister Sahib Singh Verma told reporters in New Delhi, after the 162nd meeting of the EPFO board.
Having paid at nine per cent to EPFO for the last two years, the troubled term-lending institution would have to pay up another Rs 30 crore (Rs 0.30 billion) if it has to clear its arrears till March, 2003, Verma said, adding it was the precondition for the rollover.
From 2003-04 onwards, IFCI had offered nine per cent, to which the EPFO responded that IFCI would have to pay at 10 per cent.
Asked whether there was any help from the finance ministry, Verma said both the labour and finance ministries had put pressure on IFCI, which owed around Rs 1,000 crore (Rs 10 billion) to the EPFO alone.
Brushing aside reports that the labour ministry had asked the finance ministry for a letter of comfort to stand guarantee, Singh said it was not possible since the finance ministry could not issue that.
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