Employees’ Provident Fund Organisation (EPFO) subscribers will soon be able to withdraw their provident fund savings directly into their bank accounts using the Unified Payments Interface (UPI). The system is expected to be operational by April 2026. The move is aimed at simplifying access to funds and reducing delays in withdrawals for the country’s eight crore EPFO members.Currently, EPF members must file withdrawal claims, a process that can be time-consuming. Under the new system, a portion of the EPF will be frozen as a minimum balance, while the rest can be transferred directly to members’ bank accounts using their linked UPI PIN for secure transactions. Once credited, the funds can be used for payments or ATM withdrawals, according to news agency PTI. According to the agency, EPFO is working to resolve software glitches to ensure smooth implementation. “This system will benefit around eight crore members,” the official familiar with the matter said. Under the auto-settlement mode, withdrawal claims are electronically settled without manual intervention within three days. The claim limit for auto-settlement has already been increased from Rs 1 lakh to Rs 5 lakh, enabling members to access funds quickly for illness, education, marriage, and housing purposes.EPFO first introduced online auto-settlement of advance claims during the Covid-19 pandemic to provide timely assistance. However, all members had to file claims to access their own funds. The new system will eliminate this step, easing the burden on the EPFO, which processes over five crore claims annually.The source clarified that EPFO cannot allow unrestricted direct withdrawals as it does not hold banking licences, but the government aims to make EPFO services at par with banks.In October 2025, the EPFO’s apex decision-making body, the Central Board of Trustees (CBT), approved simplification and liberalisation of partial withdrawal provisions. Union labour minister Mansukh Mandaviya has since approved the minutes of the meeting, which will be formally notified shortly.Under the revised provisions, partial withdrawals have been streamlined from 13 complex rules into three categories: Essential Needs (illness, education, marriage), Housing Needs and Special Circumstances. Members can now withdraw up to 100 percent of their eligible balance, including both employee and employer contributions, while maintaining 25 per cent as a minimum balance to continue earning interest at the current 8.25 per cent per annum.This rationalisation ensures members can access funds easily while preserving a substantial retirement corpus. With simplified procedures, zero documentation and 100 percent auto-settlement for eligible withdrawals, the new system is expected to significantly enhance the ease of living for EPF members.
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