NEW DELHI, JAN 17: In a major boost for over 8 crore Employees’ Provident Fund Organisation (EPFO) subscribers, members will soon be able to withdraw their provident fund (EPF) directly into bank accounts via the Unified Payments Interface (UPI) payment gateway by April 2026, a senior government source revealed to PTI.
The Labour Ministry is spearheading this transformative project, which will freeze a certain proportion of EPF balances while making a substantial portion instantly accessible. Subscribers will view their eligible EPF amount in real-time through the EPFO portal, linked to their seeded bank accounts, and complete secure transfers using their UPI PIN.
Once credited to bank accounts, members gain full flexibility to utilize the funds—whether through electronic payments, debit card transactions, or ATM withdrawals—eliminating the need for cumbersome claim processes.
Currently, EPFO members must file withdrawal claims, a time-intensive process despite the existing auto-settlement mode that processes claims electronically within three days without manual intervention. The auto-settlement limit has already been enhanced to Rs 5 lakh from Rs 1 lakh, enabling faster access for needs like illness, education, marriage, and housing.
EPFO introduced online auto-settlement during the COVID-19 pandemic to provide rapid financial relief, but all withdrawals still require claim filing. With over 5 crore claims—mostly for EPF withdrawals—processed annually, the new UPI system aims to streamline operations, reduce administrative burden, and match banking efficiency. Notably, EPFO lacks a banking license for direct withdrawals, prompting this innovative bank-linked approach.
In October 2025, EPFO’s Central Board of Trustees (CBT), the apex decision-making body, approved sweeping reforms to liberalize partial withdrawal provisions, now awaiting formal notification following approval by Union Labour Minister Mansukh Mandaviya.
The revamped rules consolidate 13 complex provisions into a single streamlined framework categorized into three types: Essential Needs (illness, education, marriage), Housing Needs, and Special Circumstances. Members can now withdraw up to 100% of their eligible EPF balance, including both employee and employer contributions.
A key safeguard requires maintaining a 25% minimum balance in members’ accounts at all times, ensuring continued accrual of EPFO’s attractive 8.25% annual interest (compounded) to build a robust retirement corpus.
This rationalization promises zero-documentation requirements, paving the way for 100% auto-settlement of partial withdrawal claims. By enhancing accessibility while protecting long-term savings, the reforms significantly improve ease of living for EPFO subscribers amid rising financial demands.
The source emphasized that resolving software glitches remains a priority for seamless rollout, positioning EPFO services on par with modern banking standards.
