Ministry asks RBI to examine Workers’ Bank proposal

The Labour Ministry has asked the Reserve Bank of India (RBI) to form a panel headed by a former Deputy Governor of the central bank to look into a proposal of creating a Workers’ Bank using Employees’ Provident Fund (EPF).

What the Workers’ Bank does?

It aims to improve the earnings of Employees’ Provident Fund Organisation (EPFO) by investing its corpus in various instruments. As on 31 March 2015, EPFO’s total corpus stood at Rs.6.34 lakh crore.

Background:

The proposal was mooted by the trade unions about a decade ago and has been discussed by Labour Ministry and Employees’ Provident Fund Organisation (EPFO) for several years now.

• A theme paper to the government was submitted in 2004 on setting up ‘Workers’ Capital Trust’.
• The idea was modelled on similar experiences in countries like Canada, Netherland, Switzerland and South Africa where a collective pension fund system invests worker’s savings in equities of domestic and global markets.