EPFO Update: Provident fund withdrawals via ATMs from 2025; Know How it will work?

EPFO Update: Starting in early 2023, EPFO subscribers will have the convenience of withdrawing their PF savings directly from ATMs. Labour Ministry Secretary Sumita Dawra said the Labour Ministry is currently improving its IT systems to provide better services to workers in India. As a result, EPFO subscribers will be able to access their provident funds at ATMs without any hassle, beginning next year.

What the Labour Secy said

The Labour Ministry is upgrading its IT systems for enhanced services to India's workforce. 

EPFO subscribers will be able to withdraw from their provident funds directly from ATMs starting next year.

A claimant, beneficiary, or insured person will be able to access their claims conveniently through ATMs, with minimal human intervention

Systems are evolving, and every two to three months, you will notice significant improvements

How the PF withdrawal from ATMs will work?

The new system will implement specialised PF withdrawal cards that operate similar to traditional bank ATM cards. Withdrawals will be limited to 50% of the PF balance in order to guarantee sufficient funds for emergencies.

Users will have the ability to retrieve their funds by utilising their registered UAN (Universal Account Number) or connected bank accounts.

Withdrawals are expected to require multi-factor authentication, which may include receiving a one-time password (OTP) on the mobile number linked to the account. This measure is implemented to enhance security and adhere to EPFO regulations.

Adhil Shetty, CEO of Bankbazaar.com, explained the new EPFO system as:

Subscribers will benefit from enhanced accessibility with the option to withdraw funds from ATMs, eliminating the need to visit EPFO offices or go through complex processes. 

Convenient ATM withdrawals enable faster transactions, averting delays commonly encountered with traditional PF claim procedures and providing swifter access to funds in times of need.

24/7 availability of ATMs ensures round-the-clock accessibility to PF funds, offering subscribers flexibility to withdraw funds anytime, even on weekends and holidays.

Enhanced efficiency is guaranteed with updated IT systems facilitating smoother transactions, minimizing errors, and enhancing reliability in the process.

Immediate access to funds through ATM withdrawals bolsters financial security, offering subscribers greater financial flexibility, particularly during urgent situations such as medical emergencies or unforeseen expenses.

Current PF withdrawal rules

During employment, employees have the option to withdraw a portion of their Provident Fund (PF) balance through the EPFO portal for specific reasons, based on their years of service and the cause for withdrawal. Here are the main categories for withdrawal:

Housing: Individuals can withdraw up to 90% of their PF balance after completing a minimum of five years of service for the purpose of purchasing or constructing a house.

Medical emergencies: Members are eligible to withdraw an amount equivalent to six months' basic wages and dearness allowance, or the employee's share with interest, whichever is lower.

Education or marriage: After completing seven years of service, individuals can withdraw up to 50% of their employee share with interest for education or marriage-related expenses.

Retirement: Employees aged 54 and above have the option to withdraw 90% of their balance within one year of their retirement date.

The available withdrawal options are designed to offer financial assistance for specific life events while safeguarding savings for future needs. The government is focused on enhancing social security for employees, particularly those in the gig economy and platform sectors. Through the Code on Social Security, 2020, workers in these sectors can expect additional benefits such as medical insurance, disability aid, and access to provident funds.