The Provident Fund (PF) is a government-mandated savings initiative aimed at offering financial security and retirement benefits to employees. It functions as a long-term savings tool and is widely adopted in various countries, including India, under specific regulations.
Starting in January 2025, individuals will be able to withdraw funds from their Provident Fund (PF) accounts using ATMs. This announcement was made by Labour Ministry Secretary Sumita Dawra on Wednesday, highlighting efforts to enhance accessibility for millions of subscribers.
“We are expediting claims and striving to simplify the process to improve the overall quality of life. Claimants, beneficiaries, or insured individuals will soon be able to conveniently access their claims via ATMs with minimal human involvement,” stated Dawra.
A new system will introduce special PF withdrawal cards linked to subscribers’ accounts, which will operate like standard ATM cards. These cards will enable cash withdrawals directly from ATMs, limited to 50% of the total PF balance to ensure the availability of emergency funds.
The IT systems are undergoing upgrades to streamline the claim process, eliminating unnecessary procedures as part of this overhaul, according to Dawra.
The introduction of ATM-enabled withdrawals for EPF subscribers has transformed access to funds, providing the convenience of 24/7 service and removing the necessity for complicated procedures or visits to the EPFO office. Subscribers can now withdraw money instantly from any ATM, facilitating quicker transactions, particularly in urgent situations such as medical emergencies.
Supported by enhanced IT systems, this process improves reliability and reduces the likelihood of errors, ensuring smooth financial security. Furthermore, employees are still permitted to withdraw up to 90% of their Provident Fund (PF) balance for specific needs like housing, medical emergencies, education, marriage, or retirement, in accordance with the eligibility criteria outlined on the EPFO portal.
The government intends to raise the EPF salary cap to ₹21,000, which will benefit a larger number of employees. There are also considerations to eliminate the 12% limit on voluntary PF contributions, allowing for greater savings flexibility.
Additionally, the process for claim settlements will be made more efficient to facilitate quicker processing.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
We're Live on WhatsApp! Join our channel for market insights & updates
Get the link to download the App
