Top News

Salaried employees in India may soon receive major relief when it comes to accessing their provident fund savings. The Employees’ Provident Fund Organisation (EPFO) is preparing to roll out a new, faster withdrawal system that will allow EPF members to transfer money directly to their bank accounts through UPI, without going through lengthy claim procedures. According to reports, this new facility is expected to be launched from April 2026, benefiting nearly 8 crore EPFO subscribers.

EPF Withdrawals Set to Become Simpler and Faster

Currently, withdrawing money from an EPF account requires filing an online or offline claim. In many cases, members also need to submit supporting documents, making the process time-consuming. Even though EPFO has introduced auto-settlement for certain advance claims, members still have to initiate a formal request.

Under the proposed system, EPF members will no longer need to go through this complex claim process for partial withdrawals. Instead, eligible funds will be instantly transferred to their linked bank accounts using UPI, offering speed and convenience similar to digital banking services.

How the New UPI-Based EPF System Will Work

Once the new system is implemented, EPF members will be able to:

• Log in to their EPFO account and check how much of their PF balance is eligible for withdrawal

• Choose the withdrawal amount within the permitted limit

• Transfer the money directly to their bank account via UPI authentication using a UPI PIN

Reports suggest that initially, members may be able to withdraw up to ₹25,000 instantly through UPI. After the amount is credited, employees can use the money freely, either by making UPI payments or withdrawing cash from an ATM.

The EPFO and the Labour Ministry are currently working on finalizing the technical framework to ensure security, accuracy, and smooth implementation.

Partial Withdrawal Only, Not Full Access to PF Balance

EPFO officials have clarified that the organisation cannot allow unrestricted withdrawals like a bank, as it does not hold a banking licence. Therefore, members will not be permitted to withdraw their entire EPF balance at once through this system.

To protect retirement savings, it has been decided that:

• Employees can withdraw up to 100% of the eligible PF balance (including both employee and employer contributions) for approved purposes

• At least 25% of the total PF corpus must remain in the account to ensure long-term retirement security

This retained portion will continue to earn EPFO’s current annual interest rate of 8.25%, along with the benefit of compounding.

Reduced Administrative Burden on EPFO

Every year, EPFO processes more than 5 crore claims, most of which are related to withdrawals. Managing such a large volume places significant administrative pressure on the organisation.

Although auto-settlement has helped speed up advance claims, EPFO still needs to process and verify each request. The new UPI-based withdrawal system aims to reduce this burden, streamline operations, and give employees quicker access to their own savings without unnecessary paperwork.

Existing Auto-Settlement Facility Still in Place

At present, EPFO settles advance withdrawal claims within three days under its auto-settlement system. The maximum limit for such claims has already been increased from ₹1 lakh to ₹5 lakh, allowing members to access funds quickly for critical needs such as:

• Medical treatment

• Marriage

• Education

• Housing-related expenses

This facility was originally introduced during the COVID-19 pandemic to provide emergency financial support, and it continues to benefit employees even today.

Simplified Withdrawal Rules Approved Earlier

In October 2025, EPFO’s highest decision-making body, the Central Board of Trustees, approved major reforms to simplify partial withdrawal rules. The earlier 13 complex categories were reduced to just three broad groups:

1. Essential needs such as illness, education, and marriage

2. Housing and home-related requirements

3. Emergency situations

These changes laid the groundwork for the upcoming UPI-based system, making PF access more employee-friendly while safeguarding retirement goals.

A Step Towards Bank-Like Digital Services

While EPFO cannot function exactly like a bank, the government’s objective is to make its services faster, simpler, and fully digital. The upcoming UPI-based EPF withdrawal facility aligns with this vision by combining financial security with modern technology.

For salaried employees, this means timely access to their own savings without retiring or facing delays, while still ensuring that a substantial portion of their provident fund continues to grow for the future.

Once implemented, this system could mark a major shift in how millions of Indians interact with their retirement savings, offering both flexibility today and security for tomorrow.