Under the proposed system, EPF members will see their eligible balance available for transfer to their linked bank accounts. Members can use their UPI PIN to authorize transactions securely. Once the funds are in the bank account, they can be used for electronic payments or withdrawn via ATMs using debit cards.
Part of the EPF funds will remain frozen as per the existing rules, while the majority will be available for instant withdrawal. This mechanism ensures secure, convenient, and faster access to retirement savings.
Project Status and Benefits
The EPFO is currently resolving software glitches and preparing the auto-settlement mode for smooth operation. This system will electronically settle claims within three days, eliminating the lengthy manual claim process. Previously, the auto-settlement limit was ₹1 lakh; it has now been raised to ₹5 lakh, enabling more members to access funds for purposes like illness, education, marriage, and housing.
With the new system, millions of EPF members will benefit from direct, real-time access to their funds, improving financial inclusion and reducing dependency on manual processes.
Why EPFO Cannot Function as a Bank
While the EPFO manages the Provident Fund, it cannot operate as a bank due to the lack of a banking license. The auto-settlement and now proposed UPI withdrawal system bridge this gap, providing members with near-instant fund access while maintaining regulatory compliance.
Simplified Partial Withdrawal Rules
On 13 October 2025, the Central Board of Trustees (CBT) approved simplified partial withdrawal rules. The 13 previous provisions were merged into three categories: Essential Needs (illness, education, marriage), Housing Needs, and Special Circumstances. Members can now withdraw up to 100% of eligible balance, including both employee and employer contributions, while maintaining a 25% minimum balance.
Withdrawal limits were liberalized for education and marriage purposes, the minimum service period was reduced to 12 months, and premature settlement timelines were extended. These reforms complement the upcoming UPI withdrawal system, making EPF access more flexible and member-friendly.