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    EPFO approves Reliance AMC stake sale and new investment avenues

    Synopsis

    EPFO has approved its fund manager Reliance Capital AMC’s 26% stake sale to Japanese insurance firm Nippon Life and the proposed change in ownership structure.

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    NEW DELHI: The Employee’s Provident Fund Organisation has approved its fund manager Reliance Capital Asset Management Ltd’s 26% stake sale to Japanese insurance firm Nippon Life and the proposed change in ownership structure.

    The Central Board of Trustee’s, the funds top most decision making body, on Tuesday also allowed EPFO to park its funds in fixed deposits upto five years, short term securities and certificate of deposits of public sector banks.

    The EPFO has a corpus of Rs 3.5 lakh crore and needed to have more avenues to deposit its funds and also increase rate of return.

    As per the proposal, the EPFO would be allowed to participate in collateral borrowing lending obligation (CBLO), approved by the the Reserve Bank of India.

    "What has been agreed, which again will be recommended to the government and it has to take a view, is that the borrowing in the CBLO is to be permitted, the investment in the CDs of the public sector banks also is to be permitted and and the investment in FDs for more the one year and less than five years is also be permitted," Central Provident Fund Commissioner R C Mishra told reporters after the CBT meet.

    Although the CBT gave its approval to Reliance’s stake sale to Nippon Life, some employee unions are not very happy with the move. "We would propose in the next CBT meeting to put a restriction on appointing fund management firm having foreign equity," B N Rai from Bhartiya Mazdoor Sangh said.

    The Competition Commission of India, market regulator SEBI, Reserve Bank of India and Pension Fund Regulatory and Development Authority among other have already approved the deal, which was valued at around Rs 1,450 crore.
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