EPF money via UPI soon: EPFO plans direct bank withdrawals by April

Once the money is transferred into bank accounts, the members can use the money the way they want, like making payments electronically or withdrawing through bank ATMs using debit cards.

• EPFO may allow instant partial PF withdrawals via UPI by April.
• Members can use UPI PIN for secure transfers to bank accounts.
• 25% of contributions will remain as minimum balance for interest earnings.

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EPFO subscribers may soon be able to withdraw a part of their provident fund instantly through UPI, with direct transfers into their bank accounts expected to begin by April this year, a senior source told PTI.

According to the source, the labour ministry is working on a system under which a certain portion of the Employees’ Provident Fund (EPF) will remain frozen, while a sizeable share will be made available for withdrawal through the Unified Payment Interface (UPI). “The subscribers will be able to see the eligible EPF balance available for transferring into their seeded bank accounts,” the source said.

Explaining how the system will work, the source stated that members will be able to use their linked UPI PIN to complete transactions, ensuring secure and seamless transfers. “Once the money is transferred into bank accounts, the members can use the money the way they want, like making payments electronically or withdrawing through bank ATMs using debit cards,” he added.

The Employees’ Provident Fund Organisation (EPFO) is currently addressing software-related issues to ensure smooth implementation of the project, which is expected to benefit around eight crore subscribers. At present, EPF members have to file withdrawal claims, a process that often takes time and adds to the workload of the organisation.

Under the existing auto-settlement system, withdrawal claims are settled electronically within three days without manual intervention. The limit under this mode has already been raised from ₹1 lakh to Rs 5 lakh, enabling quicker access to funds for purposes such as illness, education, marriage and housing.

The source noted that while EPFO cannot allow direct withdrawals from EPF accounts as it does not hold a banking licence, the government wants to bring EPFO services “at par with banks” to improve ease of living for members. The move is also aimed at reducing the burden on EPFO, which processes over five crore claims every year, most of them related to EPF withdrawals.

EPFO, which has around eight crore members, had introduced online auto-settlement of advance claims during the COVID-19 pandemic to provide faster financial relief. However, members still need to file claims to access their own money,  a step the new UPI-based system seeks to eliminate.

Meanwhile, the EPFO’s apex decision-making body, the Central Board of Trustees (CBT), had in October 2025 approved major simplification and liberalisation of partial withdrawal rules. These changes are expected to be notified soon after the minutes of the meeting were approved by Union Labour Minister Mansukh Mandaviya.

To simplify withdrawals, the CBT decided to merge 13 complex provisions into a single streamlined rule covering three categories — essential needs such as illness, education and marriage; housing needs; and special circumstances. Members will now be able to withdraw up to 100 per cent of the eligible provident fund balance, including both employee and employer contributions.

At the same time, 25 per cent of contributions will be earmarked as a minimum balance to be maintained in the account. This, the source said, will allow members to continue earning the EPFO’s relatively high interest rate of 8.25 per cent per annum while building a substantial retirement corpus.

According to officials, the rationalisation of rules, combined with greater flexibility and zero documentation, will pave the way for 100 per cent auto-settlement of partial withdrawal claims, significantly improving convenience for EPF members.