Scheme of Financial Assistance to Industries registered with EPFO

The Employees’ Provident Fund Organization, India has launched a Scheme of Financial Assistance to Industries where employers will be allowed to take loan from EPFO against the Provident Fund Corpus of their Employees for disbursement of Salary to their Employees. It is to be repaid with Interest @ 10.5% before 31st March 2022. The Conditions attached for availing this Scheme are as follows-

1. The Employers and the Employees will continue to deposit their monthly PF contribution as per standard practice without any change.
2. Employers who are willing to avail this facility have to ask their employees to surrender the benefits if any availed under the previous Scheme Notification GSR.225E announced on 27th March 2020.
3. Any Employer who avail this facility, is not allowed to terminate the services of any of his employee upto 30th Sep 2020.
4. The maximum amount of Loan available to an Employer can go upto 50 % of the total amount available in the PF accounts of all the Employees with EPFO, whose names appear on the payroll of the applicant as on 31 March 2020.
5. The total amount of loan cannot exceed 6 months’ Salary of Employees OR 50 % of the total amount available in the PF Accounts of the Employees on the payroll of the applicant, whichever out of the two is lower.
6. Repayment will start after the interest free period is over. After nearly 5 months of Interest Free Period, interest @ 10.5 % p.a. will be charged which will be borne by the Employers and not by the Employees. Prepayment is permitted without any condition