The proposal to provide greater freedom to Employees' Provident Fund Organisation (EPFO) in additional financial instruments, was approved by the CBT here at a meeting.
However these approved proposals will have to be cleared by the government before implementation.
EPFO has corpus of Rs 3.5 lakh crore and needed to increase its returns on investments to provide higher rate of interest to subscribers.
"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 the CBT meet here.
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.
The decision will allow EPFO more flexibility in investment in the primary options of short term securities by the RBI.
The PF body also got approval of trustees to park its funds in certificate of deposits (CDs) issued by public sector banks as they provide higher returns.
CDs are issued by banks to raise funds from the market and are tradeable instruments. (MORE)
