SBI gives higher return of 9.7 pc to EPFO than pvt entities

NEW DELHI: Public sector lender State Bank of India has given a return of 9.7 per cent on provident fund deposits, which is over half a percentage more than the best among the private sector asset managers during the quarter ended December 2008.

The other three private fund mangers, including HSBC AMC, ICICI Pru AMC and Reliance AMC, earned a yield of 8.5, nine and 9.1 per cent, respectively during September 17 to December 31 in 2008, an Employees' Provident Fund Organisation (EPFO) source said.

EPFO, manging about 4.4 crore provident fund depositors, allowed the three private fund managers to manage its incremental deposits of about Rs 25,000 crore per annum in July last year. The main objective of this exercise was to see an improvement in returns on EPFO's investments.

In the present scenario, EPFO's return on investments, specially in central and state government securities and special deposit schemes, are not enough to pay the depositors an interest rate of over nine per cent.

EPFO has invested Rs 30,461 crore in central government securities, which earns a return of 7.25 per cent, and Rs 20,000 crore in state government securities and loans, which fetches 7.5 per cent return.