The Ministry of Labour and Employment took initiative to automatically refund EPF accounts with low balances.
The Ministry of Labour and Employment has decided to refund nearly 7.11 lakh inactive Employees' Provident Fund Organization (EPFO) accounts, each with a balance of up to Rs 1,000, which is considered to be a huge relief for thousands of workers and their families. This initiative is viewed as a component of the government's larger initiative to modernize and streamline services provided by the EPFO, making the system more technologically advanced and member-friendly.
If no contributions or transactions have been made to an EPFO account for three consecutive years, the account may be considered inoperative. Many of these accounts belong to persons who retired, changed employment, or were not aware that they had minor balances left over.
According to the new ruling, funds in inactive accounts with balances of Rs 1,000 or less would be transferred straight to the subscriber's associated bank account. Soon, subscribers' Aadhaar-linked bank accounts will receive a direct credit of approximately Rs 30.52 crore that has been sitting in these little, inactive accounts unclaimed. This will happen without the need for any paperwork, claim forms, or trips to EPFO offices.
The government has already implemented a number of initiatives in the last 12 months to enhance EPFO services and cut down on delays. These include attempts to simplify KYC and Aadhaar connection, regular review meetings to monitor grievance redressal, risk-based verification to minimize manual intervention, and increased automation in claim processing. The focus has clearly shifted towards making EPFO processes more open, quicker and with less paperwork.
At the moment, it can take up to 20 days to settle a claim. This is expected to drop to less than three days for eligible claims under the new system. This could drastically cut down on subscription wait times and member complaints if it is executed well.
