Come April, the Employees’ Provident Fund Organisation (EPFO) members will be able to withdraw their savings directly into their bank accounts through Unified Payments Interface (UPI).
This comes as a big relief for EPFO subscribers as until now, they had to file claims to withdraw a certain portion of their savings and go through a very time-consuming process. The move aims to make it easier for the country’s eight crore EPFO members to access funds and cut down on delays in withdrawals.
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How the new system works
Under this new system, a fraction of the EPF will be retained as a reserve amount while allowing the member to access immediate cash transfer with their UPI PIN linked with the EPF account. Once the funds are added to the member's bank account, they are available for spending and/or cash withdrawal from an ATM, according to news agency PTI.
The agency added that currently, EPFO is working to resolve software glitches to ensure smooth implementation.
Under the auto-settlement process (introduced during COVID) for withdrawal, the claims were set up electronically and settled without the need for manual processing within three days. The limit of claim amounts for the auto-settlement process was already increased from Rs 1 lakh to Rs 5 lakh. This enabled EPFO members to easily withdraw funds for various purposes, including illness, education, marriage and housing among others.
Prior to the auto-settlement system, a member had to file a claim in order to withdrawal funds. However, with this new process expected to be ready by April, it has eliminated this step for members and reduced the strain of filing on the EPFO, which receives more than five crore claims each year.
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Why can't EPFO directly transfer funds?
A source clarified that EPFO cannot allow unrestricted direct withdrawals because it does not hold banking licenses. However, the government aims to make EPFO services equivalent to those of banks.
The Central Board of Trustees (CBT), which is the EPFO's main decision-making group, approved simpler rules and easier partial withdrawals for users on October 13, 2025. This change lets users withdraw up to 100 per cent (75 per cent of total funds) of their eligible funds, which includes both employee and employer shares, to address urgent financial needs.
In the same month, the CBT also approved four fund managers: SBI Funds Management, HDFC AMC, Aditya Birla Sun Life AMC and UTI AMC. They will manage the EPFO's debt portfolio for five years.
