PF through ATMs empowers members

The Employees’ Provident Fund Organisation (EPFO)’s proposal to enable withdrawal of funds through ATM cards will be widely welcomed by its members. The plan is to roll out the facility by the middle of next year. There is also a proposal to introduce a digital wallet where the claimed amount could be kept and withdrawn from. The withdrawal will be subject to certain limits. The EPFO is a major social security scheme and has about 30 crore accounts. Lakhs of members are being added every year. It commands a corpus of about Rs 30 lakh crore. Every week, lakhs of people interact with the organisation; among the most significant requirements are withdrawal of funds for housing, children’s education, and weddings. The funds entrusted with the EPFO are the members’ earnings and it is important for them to have easy access to these funds.

Withdrawals from the EPF fund have often involved a lot of hassles and delays. There have even been charges of corruption. Technology has made the procedures simpler. The EPFO has said that claim rejections have been reduced to 25% till November 2024 from 35% the year before. It has claimed improvement of performance in other aspects as well. EPFO 3.0, to be launched next year, is a technology version which will allow members to withdraw up to 50% of their total deposits from ATMs using cards. It is expected to provide the members more control over their savings and improve their long-term benefits. It also gives them the option of converting savings into a pension. The IT upgrade will link the EPFO’s infrastructure with the banking system and facilitate automation, and quicker claim settlements. All members will be issued withdrawal cards. There is a view that PF money which forms the most significant saving fund for many should not be so easy to withdraw. But the idea behind the ATM card option is to ensure that the members have control over their finances.

It will take many months before the proposal becomes a reality. The labour ministry, the EPFO and the Reserve Bank of India (RBI), which is the banking regulator, have to work out the details of the plan and its implementation. The RBI has to approve the programme as well. Aspects such as the frequency and limit of withdrawals need to be decided. But once set in motion, the plan will give the EPFO’s services a whole new dimension.