EPFO to facilitate pledging of PF for buying low-cost homes by next year

The Employees Provident Fund Organisation (EPFO), the retirement fund body, will allow subscribers to pledge their provident fund against monthly installments of loans for buying low-cost houses beginning next fiscal, reports quoting EPFO sources said.

"We are working on a housing scheme for the subscribers of the Employees' Provident Fund Organisation (EPFO). We can launch the scheme in 2017-18 after introduction of our online service like settling PF withdrawal claims by March-end," PTI quoted Central Provident Fund Commissioner V P Joy as saying.

The scheme will enable subscribers to pledge their PF corpus to buy homes and pay home loan EMIs through their EPF Account, says the report.

As per the proposed scheme, there will be a tripartite agreement among the member, the bank / housing agency and the EPFO for pledging future PF contributions as EMI payment.

A committee appointed by the EPFO had last year suggested such a scheme for low income EPFO subscribers who could not otherwise buy a house during their service period.

The proposal for facilitating the EPFO subscribers to buy low cost homes was also listed on the agenda of the CBT meeting held on 16 September last year.

The report of the committee was also  presented to the trustees during the meeting.

The committee has unanimously recommended that subscribers be paid an advance from the accumulated fund to subscribers for booking the houses and allow to pledge their future PF contribution against loans from banks or housing finance companies as EMI payment.

It may be noted that labour minister Bandaru Dattatreya had told Lok Sabha in a written reply in May that the government was exploring the possibility for providing a suitable low-cost housing scheme for subscribers of Employees' Pension Fund.

It is likely that the benefits under the scheme of ministry of housing and urban poverty alleviation will also be extended to the beneficiaries of the scheme.