Ministry asks RBI to examine Workers’ Bank proposal

The Labour Ministry has asked the Reserve Bank of India (RBI) to form a panel headed by a former Deputy Governor of the central bank to look into a proposal of creating a Workers’ Bank using Employees’ Provident Fund (EPF).

Key Points

  • The proposal was mooted by the trade unions about a decade ago and has been discussed by Labour Ministry and Employees’ Provident Fund Organisation (EPFO) for several years now.
  • In 2004 a theme paper to the government was submitted on setting up ‘Workers’ Capital Trust’ to improve the earnings of Employees’ Provident Fund Organisation (EPFO) by investing its corpus in various instruments.
  • The idea was emulated from countries like Canada, Netherland, Switzerland and South Africa where a collective pension fund system invests worker’s savings in equities of domestic and global markets.
  • As on March end 2015, EPFO’s total corpus was around Rs.6.34 lakh crore.
  • Various committees set up to review the proposal had suggested that EPFO should concentrate on its core activities and were not in favour of the Workers’ Bank.

Tags: Economy, Personal Finance