The Employees' Provident Fund Organisation is rolling out a major upgrade for its subscribers. Soon, you will be able to withdraw your provident fund savings directly into your bank account using UPI. This new system aims to launch by April 2026.
Simplifying Access for Millions
This move directly benefits around eight crore EPFO members across India. It simplifies access to funds and cuts down withdrawal delays significantly. Currently, members must file withdrawal claims, which often takes time. The new process will change that.
How the New System Works
Under the upcoming framework, a portion of your EPF will remain frozen as a minimum balance. The rest can transfer directly to your linked bank account. You will use your UPI PIN to authorize these secure transactions.
Once the money hits your account, you can use it for payments or ATM withdrawals. This eliminates the need to file a claim for accessing your own savings.
Faster Settlements and Higher Limits
The EPFO already uses an auto-settlement mode for claims. This system settles withdrawals electronically without manual checks within three days. Recently, the claim limit for auto-settlement jumped from Rs 1 lakh to Rs 5 lakh.
This increase helps members access funds quickly for urgent needs like medical treatment, education expenses, marriage costs, or housing purposes.
Background and Approvals
The EPFO first introduced online auto-settlement of advance claims during the Covid-19 pandemic. This provided timely assistance, but members still had to file claims. The new UPI-based withdrawal system removes that step entirely.
In October 2025, the EPFO's Central Board of Trustees approved simplifying partial withdrawal rules. Union Labour Minister Mansukh Mandaviya has approved the meeting minutes, with formal notification expected soon.
Streamlined Withdrawal Categories
The revised provisions condense thirteen complex rules into three clear categories:
- Essential Needs: For illness, education, or marriage
- Housing Needs: For purchasing or constructing a home
- Special Circumstances: For other approved situations
Members can now withdraw up to 100 percent of their eligible balance, including both employee and employer contributions. They must maintain 25 percent as a minimum balance to continue earning interest at the current rate of 8.25 percent per annum.
Operational Challenges and Benefits
EPFO officials are working to resolve software glitches for smooth implementation. The organization processes over five crore claims annually, and this system will ease that burden.
An official familiar with the matter clarified that EPFO cannot allow unrestricted direct withdrawals since it doesn't hold banking licenses. However, the government aims to make EPFO services comparable to banks.
Expected Impact
This rationalization ensures members access funds easily while preserving a substantial retirement corpus. With simplified procedures, zero documentation, and 100 percent auto-settlement for eligible withdrawals, the new system should significantly enhance ease of living for EPF members.
The upcoming UPI integration represents a major step toward modernizing India's provident fund system, putting control directly in the hands of subscribers.
