EPFO to allow PF withdrawal via UPI soon: Here’s how instant EPF withdrawals will work

The Employees Provident Fund Organisation (EPFO) will soon allow its members to withdraw Provident Fund (PF) money directly through the Unified Payments Interface (UPI), Union Labour Minister Mansukh Mandaviya said on Tuesday.

According to the Union Minister, testing of the facility has been completed and subscribers may soon be able to transfer eligible PF balances instantly into their bank accounts using UPI, though a fixed roll out date has not been announced yet. This provision is part of various initiatives the retirement fund body has undertaken to improve the quality and delivery of service.

“We have completed the testing of the facility where members can withdraw EPF (employees' provident fund) through the use of the UPI payment gateway. The withdrawn amount will be directly transferred into the bank account of the member,” Mandaviya told reporters, according to news agency PTI.

How will provident fund withdrawal through UPI work?

The proposed withdrawal process is expected to work in a few simple steps, significantly reducing waiting time and paperwork associated with PF withdrawals. The steps include:

• Members will first be able to check the eligible EPF balance that is available for withdrawal.
• The withdrawal amount will be linked to the bank account already seeded with EPFO records.
• Users will then authenticate the transaction using their UPI PIN, ensuring a secure transfer of money into their bank accounts.
• Once approved, the amount is expected to be credited directly to the linked bank account instantly or within a short time.

The labour ministry has indicated that only a certain portion of the EPF corpus will be made available for instant withdrawal through UPI, while the remaining balance could continue to remain locked under existing EPF withdrawal rules.

So what changes for EPFO members?

At present, EPFO subscribers are required to submit an online or offline withdrawal claim application, following which the request goes through verification and processing before the money is credited to the person's bank account. Under this existing system:

• Members may face delays during claim processing
• Manual verification is required in certain cases
• Accessing emergency funds can become time-consuming and cumbersome

In contrast, the new UPI-based withdrawal system is designed to bring a change and make PF access faster, easier and more user-friendly. When the provision is formally rolled out, the withdrawn provident fund money can then be used immediately for digital payments or ATM cash withdrawals after being credited to the linked bank account.

The proposed UPI-based system aims to make PF access faster and more seamless, bringing PF withdrawals closer to the convenience of everyday digital banking services.

Other initiatives by EPFO for the benefit of members

Earlier this week, Ramesh Krishnamurthi, Central Provident Fund Commissioner at the EPFO, told reporters that the organization plans to extend its auto-settlement process to include final provident fund withdrawal claims and automate the transfer of accounts when members change employers. On Tuesday, Mandaviya confirmed the move.

In addition to that, Mandaviya said that the EPFO has taken the initiative to use WhatsApp for enhancing outreach and streamlining member services. The reason for choosing the medium is to reach mobile users.

The minister also informed that the EPFO has undertaken a focused, mission-mode initiative to reduce litigation and ensure the timely resolution of pending cases across various legal forums.

It launched a dedicated mission mode drive to dispose of cases pending before consumer courts. Under the ‘Nidhi Aapke Nikat (NAN)’ programme, cases were identified in advance and expedited.