To enhance “ease of living”, the government is mulling to introduce a mechanism of withdrawal from provident fund (PF) accounts through ATMs, by early next year, official sources told FE. The labour ministry is going to hold consultations with the Reserve Bank of India (RBI) and major commercial banks to prepare a roadmap on how this mechanism can be established, the sources said.
“At this point, the plan is at a nascent stage, and a blueprint is not yet made,” an official said. “We wish to improve the digital infrastructure of the Employees’ Provident Fund Organisation (EPFO) first. Only then, such a mechanism can be introduced,” the person added. Currently, the EPFO has over 70 million active contributors.
The sources said that the intent is to reduce processing time of claims, and smoothen the approval mechanism, for the benefit of the subscribers. The process of approvals is likely to be eased out, but it will still be mandatory, even if the withdrawal will be done through ATMs, the sources explained.
Also ReadBOBCARD launches premium credit card ‘TIARA’ for women – Know key features and benefits
“The current checks and balances (done through EPFO officers) that are needed are likely to be reduced, and a lot of the process of getting approvals for withdrawals are likely to get automated. The ministry is working on improving the user interface for subscribers,” another official said.
Further, the sources said that the limit for withdrawal is not yet decided, but the government may introduce a limit for ATM withdrawals. “There is no such plan right now to put the cap of 50% of total PF balance, for withdrawals via ATM,” the source confirmed.
The government is also exploring whether a digital wallet should be introduced, linked to EPFO, which may keep the processed claim amount, and be used for withdrawal. “There’s no finality, about this, the views of RBI are necessary in this regard,” said the source.
Also ReadCentral govt employees’ pay structure should be revised every 5 years, says union as 8th Pay Commission demand grows
FE had reported earlier processing of claims by EPFO has seen a sharp jump of about 30% year-on-year in August-September, thanks to the latest software upgrade by the world’s largest retirement fund body’s digital platform,
» Read More
