Subscribers of the Employees’ Provident Fund Organisation (EPFO) will be able to withdraw a portion of their provident fund directly into their bank accounts through the UPI payment gateway by April this year, according to a senior government source.
The labour ministry is working on a system under which a part of the EPF balance will be frozen, while the eligible portion can be withdrawn instantly using UPI. Members will be able to view the withdrawable balance and complete transactions using their linked UPI PIN, ensuring secure and seamless transfer of funds into their bank accounts.
Once credited, the money can be freely used for digital payments or withdrawn through ATMs. The move is aimed at reducing delays and eliminating the need for filing withdrawal claims, a process that is currently time-consuming.
EPFO is addressing software-related issues to ensure smooth implementation of the new system, which is expected to benefit around eight crore members. At present, more than five crore EPF withdrawal claims are processed annually.
The organisation has already expanded its auto-settlement facility, under which claims are processed electronically within three days, raising the limit to ₹5 lakh. This has helped members access funds quickly for purposes such as illness, education, marriage and housing.
The new UPI-based withdrawal mechanism is part of the government’s effort to improve EPFO services and bring them closer to banking standards, even though EPFO does not hold a banking licence.
Separately, the Central Board of Trustees has approved simplified and liberalised rules for partial EPF withdrawals, which will soon be notified. Under the revised framework, members can withdraw up to 100 per cent of the eligible balance, while maintaining a minimum balance equal to 25 per cent of contributions to ensure long-term retirement savings and continued interest benefits.