EPFO May Allow PF Withdrawal Via ATMs, Major Improvements In New Year,' Labour Secy Reveals

New Delhi: Members of the Employees' Provident Fund Organisation (EPFO) may be able to withdraw funds from ATMs Soon, as revealed by Labour Ministry Secretary Sumita Dawra to ANI. This move will simplify access for millions of employees across India if implemented. 

“We are committed to making the claims process easier and improving the ease of living. Beneficiaries will be able to withdraw PF funds from ATMs with minimal human intervention,” Sumita Dawra said during a press briefing with ANI.

How Will It Work?

The system will introduce dedicated PF withdrawal cards similar to bank ATM cards. Subscribers can link these cards to their PF accounts and withdraw up to 50 per cent of their PF balance to ensure funds remain available for emergencies. Key features of the system include PF-linked ATM cards for easy withdrawals, Direct cash withdrawal from ATMs nationwide, 50 per cent withdrawal limit of the total PF balance.

PF withdrawals via ATMs likely by 2025 (Google image)

Enhancements Underway

"We are settling claims quickly and are working to make the process easier to improve the ease of living. A claimant, beneficiary, or insured person will be able to access their claims conveniently through ATMs, with minimal human intervention," Sumita Dawra told ANI.

"Systems are evolving, and every two to three months, you will notice improvements. I believe there will be a major enhancement by January 2025," she added. 

Though EPFO currently allows linking bank accounts to EPF accounts, it is unclear whether this existing linkage will prevail for ATM withdrawals or if a new system will be introduced.

According to Bankbazaar.com CEO Adhil Shetty, this feature will make life easier for EPFO subscribers by:

1. Improving Access: No more visits to EPFO offices or navigating complex online processes.
2. Speeding Up Transactions: Withdrawals through ATMs will be instant.
3. Offering 24/7 Service: ATMs will be accessible anytime, including weekends and holidays.
4. Boosting Efficiency: Upgraded IT systems will reduce transaction errors.
5. Enhancing Financial Security: Subscribers can access funds quickly during emergencies.

Current PF Withdrawal Rules
 
Employees can withdraw up to 90 per cent of their Provident Fund (PF) balance through the EPFO portal under certain conditions, depending on their years of service and the reason for withdrawal. Key scenarios include:

• Housing: After five years of service, employees can withdraw up to 90 per cent of their PF balance for purchasing or constructing a house. 
• Medical Emergencies: Members may withdraw the lower amount between basic wages of six months plus dearness allowance or their PF contribution with interest. 
• Education or Marriage: Employees with at least seven years of service can withdraw up to 50 per cent of their PF contribution, including interest, for education or marriage expenses.
• Retirement: Employees aged 54 and above can withdraw 90 per cent of their PF balance within a year before retirement.

These provisions offer financial assistance during significant life events while safeguarding long-term savings. Additionally, the government is working to strengthen social security measures, including extending PF, medical, and disability benefits to gig and platform workers under the Code on Social Security, 2020.

ALSO READ: Sensex, Nifty Slump In Early Trade Dragged Down By Metal Stocks, Foreign Fund Outflows

Other proposed changes include:

• Raising the salary limit for EPF eligibility to Rs 21,000.
• Considering the removal of the 12 per cent cap on voluntary PF contributions.

Moreover, legal heirs of deceased EPFO members can receive up to Rs 7 lakh as an insurance benefit under the Employees' Deposit Linked Insurance (EDLI) scheme. The Labour Secretary has also confirmed beneficiaries can withdraw insurance claims via ATMs. However, nominees and legal heirs must ensure their bank accounts are linked to the deceased member's EPS account to access this facility.