New Delhi: The Employees’ Provident Fund Organization (EPFO) is set to introduce an innovative digital service for its numerous account holders, ensuring faster withdrawal of funds from PF accounts. In partnership with banks, EPFO is testing the withdrawal of provident fund balances through the Unified Payments Interface (UPI), aiming for an official launch by the end of December 2026.

Know the Key Points

– A direct connection will be established between the UAN portal and UPI for seamless transactions.
– Currently, EPFO account holders submit withdrawal claims through the UAN portal, followed by fund transfers to their bank accounts, a process that usually takes a few days.
– The new system will link the UAN portal directly to users’ UPI accounts, with plans for a dedicated mobile app launch. This app will connect to bank accounts, BHIM app, and other popular UPI apps, ensuring secure and real-time money transfers.

Withdrawal details via UPI

Account holders can withdraw up to 75% of their total EPF balance via UPI, with certain conditions.
25% of the balance must be maintained as per EPFO rules to continue receiving tax-free interest and secure the retirement fund. Instant withdrawal of 75% of the EPF balance is allowed through UPI for urgent needs like education, marriage, critical illness, or house construction.

Direct benefits to active subscribers:

With around 75 million active contributors out of the 300 million registered subscribers, this move will directly assist all active members during financial emergencies.

Considerations:

While PF funds can provide essential support, early withdrawals may impact the retirement corpus as EPF benefits from long-term interest accumulation and compounding. This facility aims to reduce the time and paperwork required to withdraw PF. The Employees’ Provident Fund Organization (EPFO) has approximately 300 million subscribers. Currently, members file claims online through the UAN portal, and upon completion of the claim, the approved amount is transferred to the linked bank account.

However, the proposed system involves linking the UAN portal to the subscriber’s UPI account. This will allow eligible members to access their PF funds through UPI. The EPFO ​​is also working on a new app that can be linked to members’ bank accounts, as well as BHIM and other UPI apps.