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EPFO Launches Bid for New Custodian Bank After 15-Year SBI Partnership

  //stocks-investing.news-articles.net/content/202 .. ustodian-bank-after-15-year-sbi-partnership.html
  Published in Stocks and Investing on Tuesday, February 10th 2026 at 6:23 GMT by moneycontrol.com
      Locales: N/A, Maharashtra, INDIA

New Delhi, February 10th, 2026 - The Employees' Provident Fund Organisation (EPFO), managing one of the world's largest retirement savings pools exceeding INR8.5 lakh crore (approximately $102 billion USD), has officially launched a competitive bidding process to select a new custodian bank. This marks the end of a 15-year partnership with State Bank of India (SBI), which has held the role since 2009, and signals a potential overhaul in the organisation's investment and operational strategies.

The decision to seek a new custodian isn't merely a procedural change; it represents a proactive effort by the EPFO to enhance efficiency, diversify its management approach, and potentially unlock higher investment returns for its over 150 million subscribers. While SBI has reliably managed the fund for a decade and a half, the EPFO believes that opening the process to competition will introduce innovative solutions and best practices in fund management, accounting, and reporting.

"This is a significant move for the EPFO," explained financial analyst Priya Sharma. "Maintaining such a vast corpus requires constant evaluation of risk and return. A new custodian brings fresh perspectives and potentially access to different investment avenues. The current economic climate demands that retirement funds optimize their performance, and healthy competition is a key driver of that."

The custodian's responsibilities are far-reaching. Beyond simply safeguarding the funds, the role encompasses meticulous accounting, accurate reporting to regulatory bodies, and ensuring compliance with all relevant financial regulations. Crucially, the custodian also plays a key role in facilitating investment transactions and managing the associated risks. The chosen bank will be responsible for the smooth functioning of all financial operations related to the EPFO's extensive portfolio, which includes government securities, corporate bonds, and, increasingly, equity investments.

Several prominent banks are expected to participate in the bidding process, including HDFC Bank, ICICI Bank, Axis Bank, and potentially even foreign banks with a significant presence in India. Each contender will be evaluated based on a stringent set of criteria, including financial stability, technological infrastructure, expertise in fund management, and adherence to security protocols. The EPFO is expected to prioritize banks with proven track records of delivering consistent returns and maintaining the highest levels of data security.

This move comes at a pivotal moment for the EPFO. The organisation has faced increasing pressure to improve its investment returns, particularly given the relatively low interest rate environment of recent years. Subscribers are increasingly demanding higher returns on their savings, and the EPFO is under scrutiny to deliver on those expectations. While traditionally focused on conservative investment options like government bonds, the EPFO has been gradually increasing its allocation to equities and other alternative investments in an attempt to boost returns. A new custodian with expertise in these areas could further accelerate this trend.

Furthermore, the EPFO is actively streamlining its operations through digitization and automation. A technologically advanced custodian capable of integrating seamlessly with the EPFO's evolving systems will be a significant advantage. This includes real-time reporting, automated reconciliation, and robust cybersecurity measures to protect against fraud and cyberattacks.

The expiration of the current agreement with SBI provides the EPFO with an opportunity to reassess its long-term investment strategy and align it with the changing needs of its subscribers. The selection of a new custodian is a critical step in that process, and the outcome will likely shape the future of retirement savings management in India. Industry experts predict that the new custodian will be announced by the end of Q2 2026, with a smooth transition planned to ensure minimal disruption to the EPFO's operations.

The competition for this contract is expected to be fierce, highlighting the importance of the Indian retirement savings market. The winning bank will not only gain access to a massive fund but also enhance its reputation as a trusted and reliable partner for long-term financial management.