EPFO’s UPI playbook: Will the landmark PF withdrawal reform be a game changer? EXPLAINED

EPFO UPI withdrawal: For years, salaried class, retirees and job-switchers were having nerve-racking experiences for withdrawing their provident fund money. Sometimes, the wait would extend to weeks or even months following repeated visits to EPFO offices and manual verification as part of the process.

EPFO has been continuously amending the PF withdrawal rules for a decade and now the process is pivoting to a faster and digital-savvy environment.

In one of its biggest landmark reforms, the Employees’ Provident Fund Organisation (EPFO) will be unveiling a new dedicated mobile application by April under its EPFO 3.0 initiative. According to a PTI report, the new app will allow subscribers to withdraw PF money instantly using UPI.

As per PTI report, citing a source, the Labour Ministry is working on a project where a certain portion of the EPF (Employees' Provident Fund) will be frozen, and the larger portion can be withdrawn from their bank accounts using the Unified Payments Interface (UPI).

EPFO Mobile App: Key Benefits & How It Will Work?

Currently, members use either the Universal Account Number (UAN) portal or the UMANG app to access their EPF account and avail of its services. These services will be available on both platforms, while the new dedicated app will further improve the accessibility and delivery of services for EPFO subscribers, according to reports.

Subscribers will be able to view their eligible EPF balance available for transfer to their linked bank account in the mobile application. They will be allowed to use their linked UPI PIN to complete the transaction, ensuring the secure transfer of funds to their bank account.

Presently, EPFO is also conducting trials using 100 dummy accounts to improve the performance of this service and resolve any technical issues that may arise.

EPFO Mobile App: Auto-settlement Vs UPI

Under the auto-settlement mode, withdrawal claims are settled electronically within three days of submitting the application form, without any manual intervention.

The limit for this auto-settlement mode has already been increased from the existing Rs 1 lakh to Rs 5 lakh. This makes it easier for most EPFO members to withdraw their EPF funds within three days for purposes such as illness, education, marriage, and house construction.

This makes it easier for a large number of EPFO members to withdraw their EPF money within three days for purposes such as illness, education, marriage, and house construction. The EPFO, which has approximately 80 million members, first introduced the online auto-settlement of advance claims during the COVID-19 pandemic to provide quick relief to those facing financial difficulties.

However, all members have to file claims to access their own EPF.

This new system is being developed to avoid this time-consuming process and reduce the burden on EPFO, as more than 5 crore claims, mostly for EPF withdrawals, are settled every year.

Sources told PTI that the EPFO cannot allow its members to withdraw money directly from their EPF accounts because the organisation does not have a banking licence. However, sources added that the government wants to improve EPFO's services to bring them on par with those offered by banks.

Why This Is EPFO’s One Of The Landmark Reforms?

– Currently, it takes up to three days for auto-settled claims (up to Rs 5 lakh) post filing. The UPI-based withdrawals will speed up the process.

– Every year, EPFO handles over 5 crore claims, and UPI withdrawals are expected to cut down the load and ramp up service.

– The UPI-based initiative makes the process completely paperless, app-driven and mobile-first.