The Government of India identified HSBC, ICICI Prudential and Reliance Capital as the three private sector finance companies, in addition to SBI that would manage the Employees’ Provident Fund Organisation (EPFO) funds totaling around Rs 2.4 lakh crore.
The EPFO board met; with Labour minister Oscar Fernandes in the chair, to take this historic decision, which had been pending since last one year, because of opposition from Communist parties.
Trade union representatives were also present at the meeting. The Congress-affiliated INTUC gave its consent to the decision while those affiliated to the Left partie submitted a vote of dissent.
The decision ends the 56-year monopoly of the State Bank of India as the sole EPFO fund manager.
The move will save the fund Rs 2.5 crore per annum in fund management fees. At present, EPFO pays Rs 5 crore to SBI. But the new fund managers have quoted lower fees. HSBC quoted the lowest at 0.0063%, followed by ICICI Prudential at 0.0075% and SBI and Reliance Capital at 0.01%.