EPF monitoring to start next week
KATHMANDU, JAN 26 -
The government is all set to monitor and supervise the self-regulated Employees’ Provident Fund (EPF) as it has prepared the necessary indicators. The EPF manages savings amounting to Rs 140 billion of employees from both the government and private sectors.
The government has already begun monitoring the Citizen Investment Trust (CIT) by preparing similar indicators.
The Finance Ministry has formed a team led by its Undersecretary Nara Bahadur Thapa and consisting of an officer from Nepal Rastra Bank and the head of the internal account of the EPF. It has planned to supervise and monitor the EPF from next week.
“We have planned to start monitoring from Sunday,” said Thapa. “If that is not possible, it will start any day next week.”
Earlier, the government had asked Nepal Rastra Bank (NRB) to supervise the EPF but it had expressed displeasure at the plan saying that it was a self-regulated entity under the EPF Act. NRB too was not very enthusiastic about the assignment for lack of legal ground.
The EPF, however, has said that it has no problems with the government monitoring it. For the purpose of monitoring and supervision, the government has endorsed the indicators based on which the transactions of EPF will be monitored.
As per the indicators, the supervision team will examine the status of the EPF’s resources and their utilization as well as the financial indicators of the last three years (fiscal 2010-11 to 2012-13) and compare its performance in the last two years.
The team will study the status of the funds, retained earnings, retained capital and the EPF’s liabilities while examining its resources.
While supervising the status of the utilization of funds, the team will scrutinize the status of the cash reserve, investment in government securities, investment in fixed deposits, investment in shares, lending to housing projects, earnings from investments, interest expenditure, net profit, management expenditure, profit before and after loan loss provisioning and employees and operation costs.
Under financial indicators, the team will examine the ratio of liquid assets against total resources, investment in infrastructure against total investment, non-performing loans against total lending, credit-to-deposit ratio, interest earning against loans, interest earning against operating income, productivity of employees compared to operating earnings and administrative expenditure against total expenditure.
Recently, the World Bank and the International Monetary Fund had showed concern over the lack of supervision of institutions like the EPF and the CIT even though they deal with massive amounts of money.
A senior Finance Ministry official said that the purpose of monitoring the EPF and the CIT was to ensure that their transactions have been carried out properly. “These two entities manage resources worth Rs 200 billion, and they must be monitored under a certain mechanism,” he added.
Source: The Kathmandu Post
