21 lakh EPF accounts with ₹8,500 crore balance are inactive: How is the govt fixing it?

More than 21 lakh Employees' Provident Fund (EPF) accounts were marked as inoperative in 2023-24, with a balance of around ₹8,505 crore, the government informed the Rajya Sabha on Thursday, August 13.

The issue was raised by Neeraj Dangi, who sought details from the Minister of Labour and Employment on the number of inoperative PF accounts and the amount lying in them from 2020-21 onwards. He also asked about the claims settled, reasons behind the increase in such accounts and the measures being taken to help EPF members claim their money.

What did the govt say about inactive EPF accounts?

In response to the question, Minister of State for Labour and Employment Sushri Shobha Karandlaje, said the financial year-wise number of inoperative accounts, the amount lying in them and the amount of claims settled are based on the Employees' Provident Fund Organisation's (EPFO) consolidated annual accounts.

The number of inactive PF accounts has risen sharply over the last few years. In 2022-23, there were around 17.4 lakh such accounts with a balance of around ₹6,805 crore, compared with 13.4 lakh accounts holding almost ₹5,000 crore in the preceding year, as per data shared by the government.

In contrast, the pace of EPF claim settlements has increased only modestly over the same period. Here’s a year-wise breakdown:

Why are so many EPF accounts lying inactive?

The minister said that the primary reason for the increase in the number of inoperative accounts is the non-filing of claims by the members after exiting service. Employees generally have the option to either initiate a transfer process while switching employers, whereas those with at least five years of continuous service can also withdraw their funds without any tax liability.

EPFO continues to give you interest even after you stop working or leave your job, until you turn 58. However, if you fail to withdraw your money post that, the interest stops getting credited to your PF account and it becomes inoperative.

She also pointed to the KYC updation drive involving Aadhaar seeding. According to the government, accounts that had not previously been classified as inoperative because the dates of birth of those members were unavailable have now been categorised as inoperative.

What steps were taken by the govt to fix the issue?

The government said it has taken some measures to identify and categorise inoperative EPF accounts with unclaimed accumulations based on the availability and status of KYC details.

A major update announced recently is the provision for auto-initiation of EPF claims that has been incorporated in the new EPF Scheme, 2026. It aims to facilitate direct credit of accumulations to Aadhaar-seeded bank accounts.

In addition, EPFO has undertaken outreach and awareness initiatives through social media platforms and the organisation of Nidhi Aapke Nikat (NAN) 2.0 camps to disseminate information among employers and employees regarding EPF services and inoperative accounts, the response read.