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New rule for UPI based withdrawal in EPFO

The Employees’ Provident Fund Organization (EPFO) has announced an important change for its members. Now employees will be freed from the lengthy process of complicated forms and bank verification to withdraw the amount from their PF account. This new rule provides the facility of UPI based withdrawal, due to which the transfer of money will be instant and directly into the employee’s bank account. This reform will prove beneficial mainly for the salaried class and middle class, who depend on PF in emergency situations. This initiative is an important step towards Digital India, which has been issued in collaboration with NPCI.

Earlier process of PF withdrawal

Earlier, the process of withdrawing PF was very lengthy and full of paperwork. Employees were required to fill various forms, undergo bank verification and multiple levels of checking. Because of this, withdrawals often took weeks. Therefore, EPFO ​​has decided to simplify the withdrawal process with the help of UPI by emphasizing on technological changes.

Benefits of the new rule

The biggest benefit of this change is time saving. Now employees will be able to get immediate assistance in incidental expenses like medical expenses, children’s education or marriage. The reduced paperwork will also reduce the chances of claim rejection, and increase transparency as the amount will go directly into the employee’s bank account. This facility will make PF as liquid as a bank account.

UPI based withdrawal process

UPI based withdrawals will start through BHIM UPI and will later be followed by inclusion of other popular apps like Paytm, PhonePe and GPay. As per RBI guidelines, the limit for general transactions will be ₹1 lakh per day, while in cases to medical, education and IPO, this limit will be increased to ₹5 lakh. In this way security will be guaranteed and misuse can be prevented.

Benefits and future plans

Labor Minister Mansukh Mandaviya said that this change will free employees from paperwork and reduce the claim rejection rate. Experts believe that this step will strengthen the Digital India strategy and move employees towards financial self-reliance. This is also a big opportunity for the fintech sector, as the addition of PF withdrawals on the UPI platform will further broaden the digital payments ecosystem.

Availability and instructions

EPFO has informed that initially this facility will be available for withdrawal of small amounts, and will gradually be extended to larger amounts also. Employees will be required to link their UPI ID on the EPFO ​​app and keep their KYC updated. In future, this reform will make PF an important pillar of retirement planning.