Reliance Capital breaks into EPF management
Around 4.5 crore workers are expected to gain from the cos' asset management expertise on retirement savings. Formula for success
By ET Bureau |
NEW DELHI: The central board of trustees (CBT) of the Employees��� Provident Fund (EPF) on Tuesday chose four asset management companies (AMCs) to manage fresh additions to the EPF corpus.
Around 4.5 crore workers are expected to gain from their asset management expertise on their retirement savings from September 1. Besides HSBC AMC, ICICI Prudential AMC and the alreadyshortlisted SBI, Reliance Capital AMC too was chosen-in a surprise decision-as an asset manager.
While HSBC AMC quoted an asset management fee of 0.00063%, ICICI���s fee was 0.00075%. Both SBI and Reliance Capital quoted 0.01%.
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Reliance Capital, however, was not among the managers shortlisted by the Finance and Investment Committee (FIC) earlier. More so, as SBI scored over Reliance on technical grounds. And only a minimum three companies were to be finalised to replace SBI, which has been the sole fund manager till date. However, CBT decoded the rules to appoint four.
The four finalised AMCs will, however, only manage the annual incremental funds of around Rs 30,000 crore. They will also render custodial services for maintaining the previous investments, currently held by SBI. The funds will continue to be managed as per the existing norms, which allow up to 5% equity investment.
At present, the EPFO does not invest in stocks, though there is a proposal to allow the fund to invest up to 10% of its corpus in equity. This plan has been vehemently resisted by trade union representatives on the CBT.
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