The Employees Provident Fund Organisation, or EPFO for short, is set to embark on a major transformation. Speculations have been rife for a long time, but now the timeline has become clear. It has been learnt that the Employees Provident Fund Organisation will enable instant provident fund withdrawals for over 30 crore beneficiaries through the BHIM app in the next two to three months.
According to a report in the Times of India, the move aims to improve accessibility and flexibility for over 30 crore members so that they can withdraw their provident fund corpus instantly. The facility is similar to ATM withdrawal services and is at the heart of the digital reforms of the retirement fund body, which manages a corpus of over Rs 26 lakh crore. EPFO has collaborated with NPCI on this and the initiative allows withdrawals directly from UPI-linked bank accounts for health, education and special situations.
Big changes coming soon in PF withdrawals EPFO is planning to enable over 30 crore beneficiaries to withdraw money instantly from their provident fund accounts using the BHIM app. The initiative is expected to be launched in the next two to three months. Under the new initiative, an employee will be able to claim PF advance in any approved category under health, education and special circumstances. For now, this feature will work only on BHIM, but it may be expanded to other UPI apps later.
After the claim is submitted, it will be verified and authenticated by EPFO at the backend, after which the claim will be settled instantly through State Bank of India, an official told The Times of India. The sanctioned amount will then be directly credited to the member’s UPI-linked bank account.
Officials hinted that an initial limit may be set to prevent misuse. “The entire corpus will not be withdrawable through the BHIM app, as RBI has set its own limits on UPI withdrawals. There is also an inherent risk in anything instantaneous. The limit is not yet fixed,” an official told The Times of India.
Where will the money be transferred?
The sanctioned amount for transfer will be directly credited to the employee’s bank account, which is linked to UPI. Currently, this feature is available only on the BHIM app. However, the feature may be extended to other UPI-based fintech applications in the future. Officials said that the withdrawal amount will be initially limited to prevent misuse of this feature. Currently, it takes at least three working days to settle an online advance claim processed in automated mode for an amount less than Rs 5 lakh, longer if it is a large claim or requires manual processing.
Conditions for withdrawal from PFAnyone can withdraw money from his Provident Fund (PF) account at the time of retirement or during certain events such as unemployment, medical emergency, education, or housing need. The eligibility conditions and withdrawal limits vary depending on the reason and the length of service of the concerned employee.
Full withdrawal is allowed in the following cases: Retirement: After attaining the age of 58 years or above.
Unemployment: If the employee is unemployed for two consecutive months. After one month of unemployment, he can withdraw up to 75% of the PF balance, while the remaining 25% is allowed after two months.
Permanent disability: Permanent and total disability, which has made a person unable to work.
Permanent Migration Abroad: If one permanently relocates to another country.
Full withdrawal is allowed in the following cases:
Retirement: After attaining the age of 58 years or above.
Partial withdrawal is allowed in the following situations:
Medical: Withdrawal can be made for serious illness of oneself, spouse, child or parent. No minimum service period is required in this case.
Housing Needs: Purchase or construction of a house or plot after five years of service, repayment of home loan after three years of service, renovation of a house after five years of completion of construction
Education: For post-matriculation education of oneself or one’s child after seven years of service.
Marriage: For marriage of oneself or one’s child or siblings after seven years of service.
Natural Disaster: Withdrawal can also be made to meet financial losses caused by natural disasters.