Samirendra Chatterjee is one of the largest fund managers in the country and certainly the one who is most closely watched. After all, as the Central Provident Fund Commissioner, he is responsible for nearly five crore provident fund accounts and manages some Rs 3.5 lakh crore. Chatterjee spoke to TOI about the changes at EPFO, the interest rate scenario and why the entity is resisting investment in equities . Excerpts:
It is still very tough to deal with EPFO - you can't find how much money there is in your account and the paperwork is cumbersome. Is something being done?
We are trying very hard to make the services to members transparent. We have already put online the position of updation of member accounts office-wise on our website. Very soon individual accounts balance too will be available online. For employers too we have simplified the process of filing statements. We have given them a software tool to enable them to download the returns from their salary bills, and send it to us in CDs so that our offices can upload it. Transfer settlements have also been computerized and are being sent electronically . There are some teething troubles because of the training it entails. But things are changing. We are taking one step at a time to ensure that services are made efficient to members.
You have started a process of streamlining of inoperative accounts. How has the response been?
Every month we get about five lakh applications for withdrawal. There has been a 30-40 % increase in that figure , which I believe is because of the announcement that accounts that have been inoperative for three years or more will not be given interest beyond March 31, 2011. Though we will stop paying interests on these accounts, the capital will remain safe. So, even if someone from the family comes and makes a claim in future, with the required identity, we will make the payment.
How much money is lying like this?
The estimate is around Rs 15,000 crore spread across 2.5-3 crore accounts. Some accounts have huge accumulations . We will invest this money but there will be no interest payment on accounts that are inoperative for three years.
How much difference will it make to the interest rate for the current year?
It is difficult to estimate now since many will withdraw now, and others will consolidate their multiple accounts through transfers.
As for this year's interest rate, it is still too early to say. Nearly 85% of our funds are already invested and returns will not be higher just because interest rates have gone up now. It is only 10-15 % on which we can hope to earn a little more, given the higher rates that are on offer at present . So, on Rs 1.8 lakh crore our returns are booked, on the incremental Rs 30,000 crore we may gain a little but it will not make substantial difference to what we earned last year (8.5%).
Source:ET & centralgovernmentemployeesportal