No more long waits: EPFO to offer UPI withdrawals by April

Are you worried about the lengthy formalities to withdraw money from your Employees’ Provident Fund (EPF) account? Here is some good news for you. All EPFO subscribers will be able to withdraw funds directly into their bank accounts through the Unified Payments Interface (UPI) by April this year, sources said.

According to a PTI report, the Labour Ministry is working on a system under which a portion of the EPF balance will be frozen, while a substantial amount will be made available for withdrawal through bank accounts using UPI.

A senior official told PTI that subscribers will be able to view the eligible EPF balance available for transfer into their Aadhaar-seeded bank accounts. They will be able to use their linked UPI PIN to complete transactions, ensuring secure fund transfers.

Once credited, members can use the money for digital payments or withdraw cash from ATMs using debit cards.

Sources said the Employees’ Provident Fund Organisation (EPFO) is addressing software-related issues to ensure the smooth rollout of the system, which is expected to benefit nearly eight crore members.

At present, EPFO members must file withdrawal claims to access their funds, a process that is often time-consuming. Under the auto-settlement mode, claims are processed electronically without manual intervention within three days of application. The limit under this mode has already been raised to ₹5 lakh from ₹1 lakh.

This enables a large number of members to access EPF funds within three days for purposes such as illness, education, marriage and housing.

EPFO, which has about eight crore members, introduced online auto-settlement of advance claims during the COVID-19 pandemic to provide quick financial assistance. However, members must still file claims to access their own funds.

The proposed system aims to eliminate this procedural burden and reduce pressure on the EPFO, which settles over five crore claims every year, mostly related to withdrawals.

Sources clarified that EPFO cannot permit direct withdrawals from EPF accounts, as it does not hold a banking licence, but the government is working to improve its services to be on par with banks.

In October 2025, the EPFO’s apex body, the Central Board of Trustees (CBT), approved the simplification and liberalisation of partial withdrawal provisions. These changes are expected to be notified shortly after the Union Labour Minister, Mansukh Mandaviya, approves the meeting minutes.

To enhance ease of living for members, the CBT decided to merge 13 complex provisions into a single streamlined rule, organised into three categories: Essential Needs (illness, education, and marriage), Housing Needs, and Special Circumstances.

Members will now be able to withdraw up to 100 per cent of the eligible balance, including both employee and employer contributions. A provision has also been made to earmark 25 per cent of contributions as a minimum balance to be maintained at all times, enabling members to earn the current EPFO interest rate of 8.25 per cent per annum and build a stronger retirement corpus.

The simplification of scheme provisions, along with greater flexibility and minimal documentation, is expected to pave the way for near-100 per cent auto-settlement of partial withdrawal claims and significantly improve service delivery.