Government Implements Two Major Reforms to Streamline EPFO Claim Processes
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Synopsis
The Indian government has unveiled two important reforms to simplify the EPFO claim settlement process, which are expected to reduce grievances related to claim rejections significantly.
Key Takeaways
- Two major reforms introduced for EPFO claim settlement.
- Removal of cheque leaf and bank passbook upload requirements.
- Benefits extended to 7.7 crore EPFO members.
- Employer approval for bank account seeding has been eliminated.
- Streamlined process will facilitate changes in bank account details.
New Delhi, April 3 (NationPress) The government has introduced two significant reforms aimed at simplifying the claim settlement procedures of the Employees’ Provident Fund Organisation (EPFO), which will greatly minimize issues surrounding claim denials.
The EPFO has eliminated the necessity to upload an image of a cheque leaf or a verified bank passbook during the online claim submission process, benefiting more than 7.7 crore members.
This requirement was previously relaxed on a trial basis for select KYC-compliant members, and since its inception on May 28, 2024, it has already assisted 1.7 crore EPFO members.
Due to the success of this trial, the EPFO has now expanded this exemption to all members, as stated by the Ministry of Labour and Employment.
Since the bank account holder's name is confirmed with the EPFO member’s information upon bank account linking with the Universal Account Number (UAN), such documentation is no longer required.
According to Union Minister of Labour and Employment, Dr. Mansukh Mandaviya, “Under the guidance of PM Narendra Modi, the EPFO is committed to reform. The introduction of these two major reforms aims to simplify, expedite, and eliminate hassles in the claim settlement process for millions of EPF members and their employers.”
To enhance the UAN bank account seeding process, the EPFO has also abolished the need for employer consent after bank validation.
At present, all members must link their bank accounts with UAN to ensure their PF withdrawals are smoothly credited to these accounts.
In the fiscal year 2024-25, 1.3 crore members sought to link their bank accounts, with requests matched against the respective Bank/NPCI requiring employer approval via DSC/E-Sign.
The ministry noted that approximately 36,000 account linking requests are made daily by members, with banks typically taking around three days for verification.
However, post-bank verification, the average time needed for employer approval is about thirteen days, creating backlogs and delays in the account linking process for members.
Moreover, this approval step does not contribute value to the verification process.
Among the 7.74 crore contributing members, 4.83 crore have already linked their bank accounts with UAN, and 14.95 lakh approvals remain pending at the employer level.
The ministry further indicated that this streamlined process will aid members wishing to update their already linked bank accounts by entering their new bank account number along with the IFSC code, verified through Aadhaar OTP.
