The Employees' Provident Fund Organisation (EPFO) has introduced two key reforms to simplify the claim settlement process for EPF members and employers. The move aims to enhance the ease of living for EPF members and improve the ease of doing business for employers, according to the Ministry of Labour & Employment.
These measures have been implemented to make the claim settlement procedure simpler, faster and hassle-free for crores of EPF members and employers. The reforms are designed to streamline the claim settlement process, reduce rejections and improve overall efficiency, allowing EPF subscribers to access financial services quickly and seamlessly.
Key reforms:
1. The EPFO has eliminated the need for members to upload images of cheque leaves or attested bank passbooks while filing claims. The requirement was initially relaxed on a pilot basis for specific KYC-updated members and has already benefited over 7.7 crore members since its launch on May 28, 2024.
The EPFO has now made this relaxation available to all members. The extra paperwork is no longer required because the name of the bank account holder is already confirmed using the EPF member's information at the time of bank account seeding with the Universal Account Number (UAN).
Around six crore members will benefit immediately after the removal of this step. It will also reduce related grievances and eliminate claim denials due to low-quality or unreadable uploads.
2. The second reform removed the need for employer approval after bank verification to streamline the process of seeding bank accounts with UAN.
At present, each member has to seed his or her bank account with UAN for their PF withdrawals to be automatically credited to that account. During the financial year 2024-25, 1.3 crore members filed requests for seeding their bank accounts, and the requests, following proper matching with the respective bank/NPCI, must be accepted by the Employer via DSC/E-Sign.
Over 36,000 requests are filed almost daily for bank account seeding, and they typically take three days to conclude the verification process. After the bank verification, the average time it takes the Employer to authorise the process is around 13 days, resulting in a backlog of workload on the Employer's end and a delay in the seeding of the Member's Bank Account.
Among the 7.74 crore members who already contribute each month, 4.83 crore have already seeded their bank accounts in UAN, while 14.95 lakh approvals are pending at the Employer level.
Hence, the role of the Employer to approve the verification of a bank account has been removed from the seeding process of the member's bank accounts to simplify 'Ease of Doing Business' for Employers and 'Ease of Living' for Members. This measure will immediately assist more than 14.95 lakh members whose approvals are pending with their employers.
The simplified approach will also help members who want to alter their already seeded bank account by providing new details and the IFSC code authenticated by Aadhaar OTP. Members who have yet to seed their bank account or alter their seeded bank account can use the above-mentioned simplified approach to get their bank account seeded as soon as possible.
