EPFO: EPFO subscribers will soon have the option to withdraw part of their provident fund using UPI. A senior official informed PTI that this direct transfer feature to subscribers’ bank accounts is anticipated to launch by April this year.
As per the source, the Labor Ministry is developing a system that will block a specific amount of the Employees’ Provident Fund (EPF), while allowing the rest to be withdrawn through UPI. Subscribers will be able to check how much they can transfer to their bank account using UPI.
Subscribers will need to use their UPI PIN for transactions
The source elaborated on how this system will function. He mentioned that subscribers can utilize their linked UPI PIN for transactions, making money transfers both easy and secure. He added, “Once the funds are transferred to the bank account, subscribers can use it however they like, whether for electronic payments or withdrawing cash from an ATM.”
The Employees’ Provident Fund Organization (EPFO) is currently developing software to roll out this initiative. Estimates suggest that around 80 million subscribers will benefit from this EPFO facility. At present, EPF subscribers must submit a withdrawal claim to access their funds, a process that can be lengthy and adds to the organization’s workload.
With the current auto-settlement system, withdrawal claims are processed electronically within three days without any human involvement. The withdrawal limit through this method has already been raised from Rs 1 lakh to Rs 5 lakh, ensuring that funds are quickly disbursed to subscribers’ bank accounts for urgent needs like medical treatment, education, marriage, and housing.
EPFO may not allow subscribers to withdraw money directly
The source said that the EPFO cannot allow subscribers to withdraw money directly from their EPF accounts because it does not have a banking license. However, the government wants to make EPFO’s services more like those of banks. This will greatly facilitate EPF subscribers. The introduction of UPI withdrawals will also reduce the workload on the EPFO.
The EPFO processes over 50 million claims annually. Most of these are related to EPF withdrawals. Currently, the EPFO has approximately 80 million subscribers. The organization introduced online auto-settlement of advance claims during the COVID-19 pandemic. However, subscribers still need to file a claim to withdraw funds. The introduction of the UPI-based system will eliminate this need.