The Employees’ Provident Fund Organisation is mulling over settling EPF withdrawal claims via the UPI platform. It is expected to be introduced in the next few months
The Employees Provident Fund Organisation (EPFO) has been grappling with several issues for quite a long time. Lately, measures have been taken, yet there is tremendous scope for improvement in its services, information dissemination, member portal, EPF transfer, information updation, and claim settlement. During the financial year 2024-25, the authority has settled more than 5 crore claims worth over Rs 2 lakh crore (2,05,932.49 crore).
Beginning this month, Union Minister of Labour and employment, Mansukh Mandaviya said, “We have implemented key measures, including an increase in the ceiling and categories of auto-settled claims, simplified member profile changes, streamlined PF transfers, and improved KYC compliance ratios. These reforms have significantly improved the efficiency of EPFO”.
The major reason behind faster claim settlement has been primarily the auto-settlement facility for certain claims, which led to almost double the number of settlements from 89.52 lakh auto settlements in 2023-24 to 1.87 crore auto claim settlements in 2024-25.
The government is further considering utilising the Unified Payment Interface (UPI) to simplify the claim settlement process for users. According to a report by Financial Express, the government plans to utilise UPI platforms for settling EPF claims and transferring funds.
Reportedly, the authority has a blueprint ready. It has involved the National Payment Corporation of India (NPCI), the governing body responsible for managing the UPI system. EPFO and NPCI are in discussions to introduce the feature of claim settlement via UPI platforms in the ‘next 2-3 months’.
Notably, UPI usage has grown rapidly since its launch in 2016. The latest RBI data shows the UPI transaction volume rose to 167300.09 lakh in December 2024 compared to 120202.26 lakh in December 2023.
UPI integration in the EPFO could be a game changer as it would not only make the process faster but also convenient for users. As cited by the source in the media report, when UPI is linked with the EPFO, users would be able to receive their claim amount through a digital wallet.
The large number of grievances against EPFO can be attributed to its administration, outdated IT systems, and other operational challenges. For this, the Central Board of Trustees (CBT) and the Executive Committee, who are responsible for the scheme’s administration, have been implementing measures for some time to streamline processes to reduce the number of complaints from subscribers.
As Madaviya said earlier this month, "Since the introduction of the simplified procedure, approximately 97.18 per cent of member profile corrections have been self-approved by members, with only 1 per cent requiring employer approval, and office intervention has been reduced to just 0.4 per cent. Further, the rejection cases have dropped to 1.11 per cent by the employer and 0.21 per cent by the regional office, reflecting the effectiveness of the streamlined processes and reduced procedural bottlenecks in claim settlements".
Now, EPFO is ready to use another significant measure, UPI, to smoothen the claim process further. UPI integration with EPFO is expected to be a noteworthy step in this direction.