IREC Rule No.920: Interest

920. Interest:-

(1)   Subject to the provisions of sub-rules (4), (5) and (6) interest shall be paid to the credit of the account of a subscriber at such rate as may be determined for each year according to the method of calculation prescribed from time to time by the President;

Provided that, during any period for which the rate prescribed is less than four percent, all subscriber who joined the fund before the 07.03.1938, shall be allowed interest at 4%.  

Railway Ministry’s Decisions:

(i) Railway servants who were termed as compulsory subscribers before the liberalization of the State Railway Provident Fund Rules in 1949 will be entitled to the protected rate of interest at 4% per annum if they are admitted to the benefits of the fund with retrospective effect on or after the 07.03.1938. This protection shall not, however, apply in the case of those who were termed optional subscribers before the date of liberalization of the State Railway Provident Fund Rules. These categories are Workshop and Shed Staff, Group ‘B’ railway servants, Temporary Engineers and Apprentices including Special Class Apprentices.

[Authority: No.F42/PF43(1), 07.03.1942, No.F43ITI(2), 25.11.1943]

(ii) The protected rate of 4% does not apply to a subscriber who has break in his service and is re-appointed on or after the 07.03.1938 even though the break is condoned by the competent authority and the subscriber has refunded the Provident Fund deposits, if any, previously received by him.

(iii) In respect of the subscribers of the ex-States Railway who before, Federal Financial integration (The date of Federal Financial Integration was 01.08.1949 in the case of the ex-G.B.S. Railway and 01.04.1950, in the case of the other ex-States Railways), were granted the protection of guaranteed / fixed rate of interest, the Board have decided that on the  accumulation in the Provident Fund account as on the 01.04.1950, of each such subscriber, who was entitled to guaranteed / fixed rate of interest under the ex-States Railway Provident Fund Rules be allowed the guaranteed / fixed rate of interest but for the subscriptions and contributions made after the 01.04.1950, the rate of interest should be declared for the fund from time to time. For this purpose, the provident fund account of each such subscriber will be split up into two parts one up to the 01.04.1950, interest accruing thereon at the guaranteed / fixed rate of interest and the other part for subscriptions after the 01.04.1950.

[Authority: No.F(E)52/IT-1/2, 11.05.1955]

(2)  Interest shall be credited with effect from the 31^st March of each year in the following manner;

(i)   On the amount at the credit of a subscriber on the 31^st March of the preceding year, less any sums withdrawn during the current year-interest for 12 months;

(ii)    On sums withdrawn during the current year otherwise than under Rule 940 interest from the 1^st April of the current year up to the last day of the month preceding the month of withdrawal;

(iii)  On sums withdrawn during the current year under Rule 940 interest from the 1^st April of the current year up to the date of tender of payment;

(iv)  On all sums credited to the subscriber’s account after the 31^st March of the preceding year, interest from the date of deposit up to the 31^st March of the current year.

Provided, that when the amount standing at the credit of a subscriber has become payable, interest thereon shall be credited in respect only of the period from the beginning of the current year, or from the date of deposit as the case may be, up to the date of tender of payment, or up to the end of the 6 month after the month in which the amount became payable, whichever is earlier;

Note: Payment of interest on the Fund balance beyond a period of 6 months may be authorized by;

(a)  The Head of Accounts Office i.e. FA&CAO (which expression includes the Pay & Accounts Officer, where there is one) up to a period of one year; and

(b)  The immediate superior to the Head of Account’s Office i.e. General Manager, up to any period,  after he has personally satisfied himself that the delay in payment was occasioned by circumstances beyond the control of the subscriber or the person to whom such payment was to be made, and in every such case the administrative delay involved in the matter shall be fully investigated and action, if any required, taken.

[Authority: No.F(E)III/78-1T/1, 13.08.1979]

Provided further that interest shall continue to be credited after the end of the sixth month after the month in which the amount became payable and up to the date of tender of payment on the amount withheld beyond the 6 month under sub-rule (2) & (3) of Rule 944.

[Authority: No.F(E)III/68PF-1/16, 16.05.1969]

Provided further that where a subscriber on deputation to a body corporate, owned or controlled by the Government, is subsequently absorbed in such body corporate with effect from a retrospective date, for the purpose of calculating the interest due on the Fund accumulations of the subscriber, the date of issue of the orders regarding absorption shall be deemed to be the date on which the amount to the credit or the subscriber becomes payable, subject, however, to the condition that the amount recorded as subscription during the period commencing from the date of absorption and ending with the date of issue of orders of absorption shall be deemed to be subscription to the Fund only for the purpose of awarding interest under this rule.

[Authority: No.F(E)III/74 PF-I-10, 15.03.1975]

President’s Decision: The period of 6 months for the purpose of the first proviso to this rule in the case of a subscriber who quits service on the last day of the month should be counted after excluding the immediate succeeding month, for the amount becomes payable to him only in that month, irrespective of whether he actually hands over charge in the afternoon of the last day of the month or in the forenoon of the following month, that is to say for instance, when a subscriber’s last day of service is the 31^st May, the period of 6 months should be  computed from July to December and not from June to November.

(3)   In this rule, ‘the date of deposit’ shall, in respect of a recovery from emoluments  be deemed to be the first day of the month in which it is recovered; and in respect of an  amount forwarded by the subscriber, shall be deemed to be the first day of the month of  receipt if it is received by the Accounts Officer before the 5^th day of that month, but if  it is received on or after the fifth day of that month, the first day of the next succeeding month;

Provided that in the case of an amount forwarded in accordance with the proviso to sub-rule (2) of Rule 910, the date of deposit shall be deemed to be the 1^st day of the month if it is received by the Accounts Officer before the 15^th of that month.

Provided further that where the emoluments for a month are drawn and disbursed on the last working day of the same month the date of deposit shall, in the case of recovery of his subscriptions, be deemed to be the first day of the succeeding month.

(4)   Interest shall not be credited to the account of a Muslim subscriber if he informs the Accounts Officer that he does not wish to receive it, but if he subsequently asks for interest, it shall be credited with effect from the 1^st day of the year in which he asks for it.

(5)   No interest shall accrue on the special contribution admissible under Rule 915.

(6)   The interest on amounts which under sub-rule (4) of Rule 932 and (1)(d) of Rule 934 or Rule 935 are replaced at the credit of the subscriber in the Fund, shall be calculated at such rates as may be prescribed under sub-rule (1) and so far as may be in the manner described in this rule.

(7)    The interest calculated under this rule shall be rounded off to the nearest rupee, fifty paise and above being counted as the next higher rupee and less than fifty paise being dropped.