Mumbai: The Central Board of Employees Provident Fund has brought in three more private sector financial companies, including ICICI Prudential, HSBC and Reliance Capital, in addition to public sector State Bank of India, to manage the provident fund corpus of around Rs250,000 crore.

''The Central Board of Trustees have decided to allow Reliance Capital, ICICI Prudential, HSBC and SBI to manage provident fund of employees," labour secretary Sudha Pillai said after the meeting of trustees in New Delhi.

Reports said of the 10 financial bids only three, including those of SBI, HSBC and ICICI Prudential, were shortlisted. Reliance Capital was a later addition, reports quoted D L Sachdeva, a member of the Central Board of Trustees, as saying.

HSBC emerged the lowest bidder, followed by ICICI Prudential, SBI and Reliance Capital, officials said, adding, the allocation of fund to the successful bidders, based on their asset management fee, would be taken by the finance and investment committee.

The meeting, chaired by labour minister Oscar Fernandes, took the decision amid protests by representatives of labour unions affiliated to Left parties.

The Central Board of Trustees of the Employees Provident Fund Organisation (EPFO) had deferred a decision on the interest rate when it met on 5 July.

The EPF currently pays an interest of 8.5 per cent per annum but there is a strong demand from employees and trade unions to raise it in the background of higher returns on deposits paid by nationalised banks.

With the Left parties exiting the alliance, there was also an easing of pressure on the UPA government to choose a private sector manager for the provident fund.

The decision, which will deny SBI a monopoly in managing provident fund totalling about Rs250,000 crore, is expected to assure higher returns on the PF corpus.

Labour ministry sources said once the private players would succeed in offering better returns, they could be asked to manage additional funds so that higher interest could be paid.