Big EPFO update: PF withdrawals got easier with these 2 major changes

Two major changes have been brought in by the Employees’ Provident Fund Organization (EPFO) that is keen to ease the Provident Fund (PF) Members’ withdrawal process. These reforms are intended to speed up claim settlements and get rid of procedural hurdles for millions of EPF subscribers.​

Elimination of Cancelled Cheque or Passbook Upload Requirement

Earlier, PF members opting for online withdrawals had to provide an image of a canceled cheque or the attested copy of their bank passbook in order to apply. This step was one of the leading causes of delays, especially if uploads were unclear or unreadable and the claim was rejected and grievances followed.

In order to recognize this issue, the EPFO no more demands this. And as such, for the purpose of the bank account seeding with the Universal Account Number (UAN), the organization pointed out that there was no need for additional documentation since it has been verified This change, it is also expected to benefit the six crore members immediately as it will streamline the claim process and reduce cases of rejection. ​

Removal of Employer Approval for Bank Account Seeding

Secondly, seeding of bank account details with the UAN is another significant reform. It used to be that member’s bank account needed to be verified by their employer before earlier, so the processing times could stretch out much further.

Verifications by banks took about 3 days, employer approvals had an average of 13 days, and the seeding process was delayed. The solution to this is the removal of employee approval post-bank verification. Around 14.95 lakh of such members would be able to access their PF faster. ​

Background and Implementation

The pilot for the reform first began with some KYC-updated members from May 28, 2024. The relaxations were extended to all EPF members after it proved successful for the members of the pilot which consisted of 1.7 crore members. Their emphasis was on the fact that these measures were aimed at improving ‘Ease of Living’ for members as well as ‘Ease of Doing Business’ for employers. ​

Official Endorsements and Future Outlook

In these developments, Union Minister of Labour and Employment, Dr. Mansukh Mandaviya said, these developments of EPFO have been possible under the leadership of Prime Minister Narendra Modi and the organization continues its reform journey to make the claim settlement process simpler, faster and hassle free for crores of EPF members and employers. ​

It is anticipated that those measures would drastically cut down on employers’ workload and speed up the claim settlement process for employees. The aim of the EPFO is to provide a seamless experience for its members by eliminating redundant steps and debottlenecking of processes through technology for verification.​

The recent reforms by the EPFO are indeed a great step towards modernizing and simplifying the process of withdrawal of PF. By eliminating the need for uploading cancelled Cheques and passbook images, as well as employer approval for seeding bank accounts, the organization has addressed two major pain points in the claim settlement process.

It is expected that such initiatives will result in increased user satisfaction, reduction in processing time, and will make it easier and more efficient for members to access their funds.