Over 8 crore contributing members of the retirement fund body Employees’ Provident Fund Organisation (EPFO) will soon be able to withdraw their funds using the Unified Payments Interface (UPI) via the BHIM app from the coming April.
Enabling EPF Withdrawals Using UPI By April This Year
With the use of this new facility, EPFO contributing members can witness their available balance, which will be segregated to show the eligible balance for withdrawal and the minimum 25% balance separately.
They have an internal discussion converging towards capping the initial withdrawal at Rs 25,000 per transaction, according to a senior government official reportedly.
Further adding, “Work is going on for the development of the entire system. Three parties are involved in the development of the system — EPFO, C-DAC (Centre for Development of Advanced Computing), and the NPCI (National Payments Corporation of India) and there is also involvement of the State Bank of India for payment coordination. The withdrawals would be facilitated through the BHIM app initially, which will credit the amount to the UPI-linked bank account directly.”
It is noteworthy here that each and every EPFO member will be able to avail the UPI facilities through the BHIM app, with the help of the existing guardrails for UPI transactions to apply as it is.
Helping Blue-Collared Workers
They are expecting to help blue-collared workers in the EPFO ambit who may not otherwise be able to avail the withdrawal process through the online portal with this facility.
Moving ahead, the officials said, “Initially, a cap of Rs 25,000 per transaction has been proposed as anything instantaneous is prone to misuse. The users will also need to be careful with withdrawals with respect to the permissible frequency of withdrawals. Even though we are giving good flexibility now for withdrawals, the frequency has been defined for the three categories in a year. If a member withdraws the amount very quickly in 2-3 transactions, and though he/she may not have availed the full limit in amount terms, the eligible frequency may get exhausted.”
This facility was already supposed to be launched but the notification of Labour Codes in November and the easing of withdrawal norms in October had to be factored in during the software development phase of the proposed UPI facility as explained by the official.
Further stated, “The withdrawal rules were changed, so the 75% and 25% balance bit and the changes in Social Security Code had to be all dovetailed into this. The work is now in its final stages, and should be available before April.”
Interestingly, the rollout of the new proposed facility comes after the EPFO announced liberalising of its withdrawal norms after its Board meeting in October last year, streamlining the withdrawal categories from 13 to three — essential needs (illness, education, marriage); housing needs; and special circumstances.
