EPF Members Set for Direct UPI Withdrawals by 2026
The Union Labour Ministry is actively developing a new system that will allow eight crore Employees' Provident Fund (EPF) members to withdraw their money directly using the Unified Payments Interface (UPI). According to sources cited by PTI, this project targets a rollout by April 2026. The initiative aims to provide quicker access to funds, streamline the withdrawal process, and enhance overall service efficiency for millions of subscribers.
How the UPI-Based EPF Withdrawal System Will Operate
Sources explain that the ministry is working on a mechanism where a portion of EPF funds will be frozen, while a larger chunk becomes available for direct withdrawal. Subscribers will be able to view their eligible EPF balance, which can be transferred into their seeded bank accounts through UPI.
To complete the transaction securely, EPF members will use their linked UPI PIN. Once the money reaches their bank accounts, they can use it freely—making electronic payments or withdrawing cash via ATMs using debit cards.
Current Status and Benefits of the Project
The Employees' Provident Fund Organisation (EPFO) is currently addressing software glitches to ensure smooth implementation. If successful, eight crore members will benefit significantly. Currently, they must navigate a time-consuming claims process to access their EPF money.
Under the existing auto-settlement mode, withdrawal claims are settled electronically without manual intervention within three days of application. The limit for this mode has recently been increased to ₹5 lakh from ₹1 lakh, enabling more members to access funds quickly for needs like illness, education, marriage, and housing.
Why EPFO Cannot Act as a Bank
Sources note that EPFO cannot permit direct withdrawals because it lacks banking licenses. Even the auto-settlement process, introduced during the COVID-19 pandemic, requires members to file advance claims. EPFO handles over 5 crore claims annually, mostly for withdrawals.
To improve efficiency, the government has taken several steps. On 13 October 2025, EPFO's Central Board of Trustees (CBT) approved simplifications and liberalised partial withdrawals. This allows users to withdraw up to 100% of eligible funds, including employee and employer shares, to meet immediate financial needs.
In the same month, CBT also approved four Fund Managers—SBI Funds Management, HDFC AMC, Aditya Birla Sun Life AMC, and UTI AMC—to manage EPFO's debt portfolio for five years.
Key Highlights of Simplified EPF Partial Withdrawals
To enhance ease of living for EPF members, partial withdrawal provisions have been simplified by merging 13 complex rules into a single, streamlined framework. This is categorised into three types: Essential Needs (illness, education, marriage), Housing Needs, and Special Circumstances.
- Members can withdraw up to 100% of the eligible balance in the Provident Fund, including employee and employer shares. The eligible balance is calculated after setting aside 25% as a required minimum balance.
- Withdrawal limits have been liberalised: education withdrawals are now allowed up to 10 times, and marriage withdrawals up to five times, compared to the previous total limit of three partial withdrawals for both purposes combined.
- The minimum service requirement for all partial withdrawals has been uniformly reduced to just 12 months.
- The period for availing premature final settlement of EPF has been extended from two months to 12 months, and final pension withdrawal from two months to 36 months.
This UPI initiative, coupled with recent simplifications, represents a major push to make EPF withdrawals faster and more user-friendly for India's workforce.
