The agenda note prepared by the EPFO said that four most frequent fund raisers in the capital market are EXIM bank, National Bank for Agricultural and Rural Development, Rural Electrification Company and Power Finance Corporation. “EPFO is not in a position to subscribe to their issuances, however attractive the returns may be, because the limit of 25 per cent of net worth of these institutions has already been exhausted,” said the note.

Citing market practices, where Insurance Regulatory and Development Authority has relaxed this norm for insurance companies to 60 per cent of net worth of the institution, the note has asked for enhancing this limit for EPFO investments to 40 per cent and 45 per cent for PSU and PSFI; and public sector banks respectively. However, it has set a rider that the increase in the exposure limit will be restricted to the AAA-credit rating (highest safety rating) instruments issued by public sector entities only.