Suspecting defaults by some state PSUs on their bonds, the EPFO may tighten investment norms of exempted provident funds that manage over Rs 1.6 lakh crore of long-term savings and bar them from investing in debt papers that are not guaranteed by the state governments.

EPFO suspects some of the exempted funds may have invested about Rs 10,000-12,000 crore in state PSU bonds that are not guaranteed by the respective governments. Some of the PSUs may have defaulted in either interest or principal payments, an official told FE.

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