EPF money withdrawal through UPI soon? Labour ministry working on direct, quicker access to funds, says report

The Union Labour Ministry is reportedly developing a system to allow eight crore employees' provident fund (EPF) members to directly withdraw their money using the Unified Payments Interface aka UPI, PTI reported, citing sources.

The project, targeted for rollout by April 2026, aims to facilitate quicker access to funds, streamline the withdrawal process, and enhance service efficiency, it said.

EPF withdrawal using UPI: How will this work?

• The source told PTI that the ministry is working on a system where a portion of the EPF funds will be frozen, and a larger chunk will be available for users to directly withdraw money from their bank accounts through UPI.
• The report added that subscribers will be able to see the eligible EPF balance available for transferring into their seeded bank accounts, as per the source.
• EPF member will be allowed to use their linked UPI pin for completing the transaction to ensure a secure transfer of money into their bank accounts.
• Once the money is transferred into bank accounts, the members can use the money the way they want, like making payments electronically or withdrawing through bank ATMs using debit cards.

Project in progress: What is the status?

According to the report, the source said the EPFO is working to resolve software glitches. If implemented, eight crore members stand to benefit, as they currently have to go through a time-consuming withdrawal claims process to access their EPF money.

• Under the auto-settlement mode, the withdrawal claims are settled electronically without manual intervention within three days of filing the application form.
• The limit of this auto-settlement mode has already been raised to ₹5 lakh from the existing ₹1 lakh.
• This will facilitate a large number of EPFO members to access their EPF money within three days for illness, education, marriage, and housing purposes, it added.

Why can't the EPFO itself act as a bank?

According to the report, the source noted that the EPFO cannot allow direct withdrawal of money by members as it does not have banking licences.

The auto-settlement process, introduced during the COVID-19 pandemic, too requires members to file advance claims. The body settles over 5 crore claims, mostly for withdrawing EPF, annually.

The government is working to improve efficiency. The EPFO's apex decision-making body, Central Board of Trustees (CBT) approved simplifications and liberalised partial withdrawals for users on 13 October 2025. This allowed users to withdraw up to 100% eligible funds (75% total funds), including employee and employer share, to meet immediate financial needs.

Further, in the same month, the CBT also approved four Fund Managers — SBI Funds Management, HDFC AMC, Aditya Birla Sun Life AMC, and UTI AMC — to manage the EPFO's debt portfolio for a period of five years.

Simplification of EPF partial withdrawal provisions — Key Highlights

• To enhance Ease of Living of EPF members, partial withdrawal provisions have been simplified by merging 13 complex provisions into a single, streamlined rule categorised into three types — Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances.
• Members will be able to withdraw up to 100% of the eligible balance in the Provident Fund including employee and employer share. Eligible balance is the amount that remains after 25% is kept aside as required minimum balance.
• Withdrawal limits have been liberalised—education withdrawals allowed up to 10 times and marriage up to five times (from existing limit of total of three partial withdrawals for marriage and education in all).
• Requirement of minimum service has been uniformly reduced to only 12 months for all partial withdrawals.
• Period for availing premature final settlement of EPF has been extended from the existing two months to 12 months and final pension withdrawal from two months to 36 months.

(With inputs from PTI)