The government has fixed the maximum limit of monthly deposit to provident fund of all public servants to be 25% of their basic pay.
The decision has been taken in a bid to avert discrimination against government employees in lower positions, sources told the Dhaka Tribune.
The Finance Division issued a circular in this regard on Sunday, November 1, amending the provisions of the General Provident Fund Rules, 1979.
The new rule came into effect on Sunday. The minimum deposit limit has been set to 5% of basic pay.
Earlier, there was no maximum deposit limit to government provident funds and the minimum limit was 10% of basic pay for those whose salary was more than Tk4,000.
The interest rate on deposits in provident fund is currently 13.5%. That is why many government officials took advantage of the old provision and deposited their entire basic pay in the fund as no banks or financial institutions would provide such a high amount of interest, said an official at the Finance Division.
Doctors, engineers and corrupted public servants enjoyed the maximum benefit – depositing 100% of their salaries in provident fund, he said, seeking anonymity.
But with the new rule in place, all public servants – low and high-ranked – will be able to enjoy the benefits of provident fund equally, he added.
In the budget of FY2015-16, the government has allocated Tk1,900 crore for the payment interest to the government provident funds. The allocation was Tk1,700 crore in previous fiscal year.