EPFO to Allow Direct EPF Withdrawals via UPI from April

The Employees’ Provident Fund Organisation (EPFO) is set to revolutionize the way subscribers access their provident fund savings. By April 2026, members will be able to withdraw their EPF balances directly into their bank accounts through the Unified Payment Interface (UPI), according to a senior source.

Seamless EPF Access Through UPI

The Labour Ministry is implementing a new system where a portion of the EPF will remain frozen, while the available balance can be transferred electronically. Subscribers will be able to view their eligible EPF balance linked to their bank accounts and use their UPI PIN to authorize secure transactions.

Once funds are credited, members can freely use the money for electronic payments or withdraw cash via ATMs using debit cards, offering a seamless financial experience.

Resolving Software Challenges

EPFO is currently addressing technical issues to ensure smooth implementation. This system is expected to benefit around eight crore members, eliminating the time-consuming process of submitting withdrawal claims manually.

Auto-Settlement Mode for Quick Withdrawals

The auto-settlement facility, initially introduced during the COVID-19 pandemic, allows claims to be processed electronically within three days. Previously limited to Rs 1 lakh, the withdrawal cap under this mode has been increased to Rs 5 lakh.

This facility enables members to access funds swiftly for medical emergencies, education, weddings, and housing needs, streamlining financial support for millions.

Simplifying Partial Withdrawal Rules

In October 2025, the Central Board of Trustees (CBT) approved the simplification and liberalization of EPF partial withdrawal provisions. Union Labour Minister Mansukh Mandaviya has since approved the meeting minutes for official notification.

The new rules merge 13 complex provisions into three clear categories:

• Essential Needs: Illness, education, and marriage
• Housing Needs: Home purchase, construction, or repairs
• Special Circumstances: Unique situations requiring urgent access to funds

Maintaining Retirement Security

Members will now be able to withdraw up to 100% of their eligible balance, including both employee and employer contributions. To ensure continued growth of retirement savings, 25% of contributions must remain as a minimum balance, allowing members to earn the full 8.25% annual interest with compounding benefits.

This approach balances flexibility with financial security, enabling members to meet immediate needs without compromising long-term retirement planning.

Toward 100% Auto-Settlement

The new framework eliminates unnecessary documentation and facilitates automatic claim settlements, making partial withdrawals fully streamlined. This modernization will reduce EPFO’s administrative burden, as over five crore EPF withdrawal claims are processed each year.

The initiative reflects the government’s goal of enhancing the ease of living for EPF members while bringing EPFO services closer to the convenience offered by banks.

About the Author

Sorit Chaudhary

Author

View All Posts