The New System with UPI Withdrawals Can Make Older Time-consuming Process More Efficient, Reducing the Burden on the PF Organization

Advertisment

EPFO is preparing to introduce UPI-based PF withdrawals, a move expected to significantly reduce processing time and improve ease of access for salaried employees. This new system, part of the EPFO 3.0 upgrade, aims to make the withdrawal process instantaneous, paperless, and fully digital.

PF Withdrawal via UPI

The Employees' Provident Fund Organisation (EPFO) is set to launch a new mobile application by April 2026. It will allow its 8 crore members to withdraw eligible portions of their Provident Fund (EPF) directly via Unified Payments Interface (UPI). According to reports, EPFO is upgrading its internal software and holding discussions with banks and UPI platforms to roll out the service in phases.

A certain proportion of the EPF will be frozen, and a large chunk will be available for withdrawal through their bank account using UPI. The new system aims to simplify the process and ease the load on EPFO. The organization handles over 5 crore claims annually, mostly for EPF withdrawals.

Advertisment

EPFO is also looking at allowing PF withdrawals through ATMs. One proposed idea is a PF card, similar to a debit card, which could let subscribers withdraw cash up to a fixed limit.

Benefits of the New PF Withdrawal System

EPFO members currently need to apply for withdrawal claims, which takes time. The new auto-settlement mode settles claims electronically within 3 days, without manual intervention. 

Initial report suggests a proposed cap of Rs 25,000 per transaction for UPI-based withdrawals. The app will display the "eligible balance" for withdrawal while keeping a minimum of 25% of the total balance locked for retirement security.

Advertisment

Auto-settlement of Claims

This online auto-settlement of advance claims was first introduced during the Covid-19 pandemic to provide quick assistance. This mode makes it easier for individuals to get their EPF money (up to Rs. 5 lakh) within 3 days of filing the application form. 

Under the auto-settlement mode, the withdrawal claims are settled electronically without manual intervention. It has helped a large number of EPFO members to access funds in case of emergency, education, marriage and housing purposes.

Closing Note

While the new app becomes the primary mobile interface for UPI withdrawals, existing platforms like the EPFO Unified Member Portal and the UMANG app will remain operational for other services.

Advertisment

The Ministry of Labour and Employment is currently conducting trial runs using 100 dummy accounts to identify and resolve any technical issues before the public rollout in April 2026. This move could end the current lengthy claim and approval process, giving employees quicker access to their own savings during emergencies.