SBI is demanding a higher fee for collecting provident fund (PF) deposits. The move comes after the Employees Provident Fund
Organisation (EPFO) clipped the bank’s monopoly over the management of the Rs 30,000-crore EPFO corpus.
Currently, SBI charges Rs 1.50 on every Rs 1,000 deposited as monthly fee from EPFO subscribers. The bank now wants EPFO to hike this fee to Rs 5 per Rs 1,000 deposited, an issue that is likely to figure at the next financial and investment committee (FIC) meeting of EPFO. If SBI gets a green light, it would substantially raise the costs of collecting pension funds for the organisation.
The PF contributions of the four crore plus subscribers of EPFO are deposited by their respective employers in local branches of SBI. EPFO identifies one ‘link branch’ of SBI in a state from where the collected funds are remitted to the Organisation’s account. For such transactions, SBI charges Rs 1.50 on every Rs 1,000 deposited. In case an employer deposits money in a non-linked SBI branch, the bank charges a higher sum of Rs 2.50 per Rs 1,000 for remitting it to EPFO via the link branch. The bank now wants to raise it to Rs 5 on every Rs 1,000 deposit for both direct as well as such indirect transactions, a senior EPFO official told ET.
SBI also wants EPFO to pay it for all other additional services that it provided the organisation. At present, SBI is assisting the EPFO in its pilot project on online deposit of PF for a group of companies situated in Gurgaon. Besides, SBI has also made it clear that any extension or replication of the the project will come for a fee.
SBI currently has monopoly in collecting PF deposits for EPFO. Though, a proposal to enroll other public sector banks is under EPFO’s active consideration, it is yet to take a final call. As a part of this move, it has already initiated talks with other 10 nationalised banks.Enrollment of other nationalised banks would help EPFO bring down the its own collection expenses, the official said.
However, since multiple collection will also increase paperwork for EPFO, like cross-checking of details in cheques, the organisation is being cautious in its approach.