PF Withdrawal Made Easier: Key Changes Introduced by EPFO

PF Withdrawal Made Easier: In a major relief for the employees, the Employees Provident Fund Organisation (EPFO) has abolished the requirement of uploading a cancelled cheque and employer verification of bank accounts for online withdrawal applications.

The purpose is to expedite the settlement of claims for nearly 80 million members while making it simpler for both employees and employers.

The labour ministry said in a statement on Thursday that the removal of these steps would help streamline the claim process significantly and reduce grievances over claim rejections.

Out of 77.4 million active EPF contributors, 48.3 million have seeded their bank accounts with UANs. The request for bank account seeding is around 36,000 per day, and banks take an average of three days to verify the seeding. These delays were further aggravated by an extra 13 days due to employer approval processes, adding to the mountains of pending approvals.

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Key changes in the EPF withdrawal process:

No upload of a cancelled cheque or passbook: Members will no longer upload an image of a cheque leaf or attested photocopy of the bank passbook while filing online withdrawal claims.

Employer approval not required for bank verification: The employer’s approval for verifying bank account details is completely done away with.

Simple bank account changes: EPF members wishing to change their already linked bank account can now change their account by entering their new bank account number and the IFSC Code, which would work fine for validation through Aadhaar-based OTP verification.

Quick claim processing: These steps will be removed from the procedure, thereby stopping any delays that the uploading of poor-quality documents or unreadable documents would entail, which might trigger rejection of the claims.

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Faster processing to benefit lakhs of members

The new amendments were tested as a pilot project on May 28, 2024 for some KYC-updated members. Benefiting around 1.7 crore EPF members, based on its success, EPFO has now extended the flattening exercise to all members.

"Since the bank account is already verified along with the EPF members' details at the time of seeding of bank accounts with the UAN, this additional documentation is no longer necessary," the Labour Ministry stated.

More than 14.95 lakh EPF members will also benefit from this immediate relief, as is evident from the pending employer approval for bank verification, ushering in faster access to their money.

With the new reforms, the EPFO is hoping to facilitate the ease of living for EPF members and ease of doing business for employers, thereby smoothing the withdrawal process and enhancing its efficiency.

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