Withdrawal of EPF from ATM may take time

NEW DELHI: The plan for allowing withdrawal of employee provident fund (EPF) claims through ATM has a long way to go.

Labour ministry sources have said that this is just an idea floated by the labour minister, and it needs a lot of deliberations between the labour ministry, EPFO and the banking regulator before it could be implemented.

The idea is to have a hassle-free claim settlement process as high rejection rates are becoming a headache for individuals, who keep their life savings with EPFO (Employee Provident Fund Organisations) for use after retirements or during emergency fund requirements.

However, the idea of allowing EPFO members to withdraw from ATM is not happening in the immediate future. The ministry has a vision to ease the claims process, and the idea is at a very early stage, says a labour ministry source. “Without the approval of the RBI, the banking regulator, the idea cannot be implemented. Besides, there are other several issues like frequency and limit of withdrawal that the EPFO needs to figure out before going ahead with the project,” the labour ministry source told TNIE.

The ministry is also exploring the possibility of introducing a digital wallet, where the claimed amount could be kept and withdrawn from. “These ideas, including issuing ATM cards, cannot be implemented without a strong backing from the banking regulator and banks,” the ministry source said, adding that anything like this is not possible in the immediate future.

Improving digital infra

The EPFO has been trying to improve its digital infrastructure and ease the claims process. Early this year, the EPFO implemented the first of the six modules of Central IT System (CITS) 2.01. This facility will reduce the time and effort while providing facilities such as online submission of application, validation of applications and transfer of past accumulations of the member.