Differences between Provident Fund and Citizen Investment Trust


Provident Fund (PF) and Citizen Investment Trust (CIT) are the part of the Nepal Government service with an intention to encourage the public citizen for investing their savings in low-risk projects. Establishment of these legal institute helps in promoting people to invest their capital and broaden the aspect of business value in Nepali society. These government bodies are prominent for providing social security to the investors.

Provident Fund (PF) is the saving scheme run by Government of Nepal under Ministry of Finance and Economic Affairs since 1934. At the beginning, the scheme was started by Army as Army Provident Fund. In 1948, this service was implemented throughout the country covering all civil servants. In the current situation, PF includes around 5Lakh contributors from Government organization, Nepal Police, Nepal Armed Police, Nepal Army, Education and Private organizations. For all the contributors, EPF also provides social security services like Accident Indemnity, Funeral Grant, Insurance, Medical Assistance and Maternity & Child Care. For the civil employee, it is compulsory to save PF in their account. This will eventually offer payout flexibility at the end of the service period.

karmachari Sanchaya Kosh

Image src:  http://gbsnote.com/employee-provident-fund/

Citizen Investment Trust (CIT) is the investing platform founded by Nepal Government on 18th March 1991. It is open for all interested Nepalese investors. The share of CIT is owned by different groups. Over the total amount of share, public citizen has occupancy of 20 percent, bank and corporate office has occupancy of 20 percent, Nepal Government owes 10 percent, Nepal Rastra Bank owes 13 percent, Rashtriya Bima Sansthan owes 27 percent and Nepal Stock Exchange owes 10 percent shares. The current status of CIT includes more than 5Lakhs participators with the total fund of NRs.8167.05Crore. In recent years, CIT launched retirement schemes and mandatory insurance funds for the employee of several institutions.

Other Schemes of CIT includes:

– Citizen Unit Scheme

– Employees Saving Growth Retirement Fund

– Fund for Insurance (Nepal Army)

– Insurance Fund (Nepal Police)

Screen Shot 2017-08-08 at 10.52.59 PM

Image src: http://gbsnote.com/nagarik-lagani-kosh-nlk-gov-np/

Now, let’s discuss the gist of this article i.e. the key differences between PF and CIT.

Basis of Comparison PF CIT
Definition PF is the fund, invested by employees on the regular basis from their monthly income, which thereon is provided at the time of retirement. CIT is an investment, contributed by either public or foreign group or individual as their saving and is provided after the completion of a contract period.
Who can contribute All employees in either private and public sectors within the country have right to invest in PF. All the interested Nepalese contributors residing inside or outside the country can easily invest in CIT.
Objective The main objective of PF is to support the employees financially after retirement. PF also extend its vision to manage the collected deposit from employees by investing in infrastructure/social development.   The objective of CIT is to encourage all the interested investor towards development campaign and accelerate the capital market.
Schemes & Programs PF came up with the provision of different schemes like a special loan, house loan, education loan, revolving loan and other services. CIT offers schemes like ESG Retirement Fund (deposit/loan), House loan, Insurance Fund, Citizen Unit Scheme, Gratuity Fund, Investors’ Account scheme and others.
Deposit Interest Rate The current interest rate provided by PF is 8 percent. The current interest rate provided by CIT is 6.5 percent.


Employees Provident Fund (EPF), also known as Karmachari Sanachaya Kosh is a legal body of Government to manage Provident Fund for both private and public sector employees. This fund manages Sainik Drabya Kosh, Nijamati Provident Fund and Provident Fund Department of Nepal. The primary objective of EPF is to provide the financial support to employees after their retirement. This fund is collected by deducting a certain amount of money from the monthly salary and is deposited in EPF on the monthly basis. In Nepal, the rate of PF contribution is 10 percent of the monthly salary.

EPF allows the participation of private company to join this department only if interested company fulfill the criteria. The most important aspect includes the requirement of more than 10 employees in the company to grant membership.

EPF collects a deposit from the employees and invests a lump of the amount in different projects. Recently, it invested in Upper TamaKoshi HydroPower Project. Besides this, EPF has invested to build commercial buildings at different places and rented. The collected profit is distributed to all contributors.

Citizen Investment Trust (CIT), also known as Nagarik Lagani Kosh is a statutory part of Nepal Government that invites all interested people to join the committee and make a contribution. It mainly focuses on the involvement of public or foreign investors on different national projects like hydropower, infrastructure development, productive sector, tourism promotion and others. It includes a provision to provide 80 percent deposit as a loan to the investors after taking collateral. The primary motive of CIT is to accelerate the capital investment and propose different development activities which support the development of the nation.

CIT has invested billions of rupees in Upper TamaKoshi HydroPower Project and buying the shares.

EPS and CIT invest their collection to the mega project of Nepal for the growth of the dynamic capital market. On June 12, 2017, both EPS and CIT agreed on a pledge with Nepal Airlines Cooperation (NAC) to provide a loan of Rs. 12 billion each to purchase aircraft. Likewise, there are several sectors in Nepal where EPS and CIT can contribute their collection and make a profit.


Saving is always important. In Nepal, PF and CIT are two autonomous bodies to enhance public investment at the national level. Both of them provide a benefit of granting financial support and also offer easy loan at the reasonable interest rate.

The main difference lies basically on the compulsion of depositing the fund. PF is a compulsory funding program to the civil servants while CIT is not.