Union Labor minister Mansukh Mandaviya stated on tuesday that provident-fund accounts, which include savings essential to workers' financial stability, are being connected to bank accounts so that they can be accessed directly at ATMs using debit cards. Additionally, the government said that the ₹1 lakh cap on automated settlement of advances, or partial withdrawals, would be raised to ₹5 lakh.
"With the increased ₹5 lakhs cap, more advanced claims will now be eligible for auto-settlement, which will process them three days after they are submitted. In a statement released tuesday, the government said, "This increased limit and quicker access to funds will help members get timely financial support when they need it most."
At a ceremony on september 17 to commemorate the 100 days of the Modi government's third term, Mandaviya first announced the modification in the cap, which would take effect on Tuesday.
According to the minister, when the feature is implemented, consumers would have the choice to choose an employee's provident fund (PF) account in addition to standard savings deposits while interacting at an ATM. After that, the user can deal with the Employees' Provident Fund Organization (EPFO), the state-run retirement fund manager, and withdraw appropriate amounts without having to apply.
"The PF account will be integrated into ATMs, and an employee will be able to directly withdraw funds as per eligibility," said Mandaviya.
The minister stated that efforts were underway to make this capability accessible across banks, although he did not specify when this function would be implemented.
News agency PTI quoted an unnamed senior official as stating that a certain proportion of a PF fund will be frozen and made available to the account holder's bank account, which can then be withdrawn using methods such as UPI or ATM debit cards.
Some back-end software integrations are still being worked out, the news agency reported, with the official explaining that EPFO, which does not have a banking licence, cannot allow members to withdraw money directly from their funds.
According to an official, the goal is to provide "PF functionality" in debit cards and ATMs as bank accounts, Aadhaar, and PF accounts are already connected. In order to assign a uniform account number to each employee, the EPFO has mandated that subscribers link their PF accounts to their biometric identification, Aadhaar.
For around 70 million salaried Indians, provident funds offer a safety net and retirement income. It is frequently the main source of working people's lifetime savings.
All businesses with 20 or more employees are required by the PF Act to register with the EPFO. The law mandates that 12% of an employee's base pay be contributed by both the company and the employee to a corpus overseen by the EPFO.
During specific financial situations, such as medical treatment, a home purchase, or a family marriage, an employee may take out a portion of their PF assets.
"Once the ATM feature is up and running, users won't have to apply for advances and fill out additional papers. Direct withdrawals will be automatically permitted by the ATM based on eligibility, Mandaviya stated.
The action is a component of a reform of the retirement funds organization, which has been hampered by convoluted processes and holdups in processing workers' claims.
One of the most significant recent changes is that employees no longer need to obtain approval from and attestation from their HR department in order to withdraw or settle claims. Both of these procedures are now entirely conducted online.
According to the minister, two more months will be needed to complete the revamp of the EPFO's website, back-end, and gateway for essential services.
According to the minister, who was recently in Geneva for a global labor conference, the international Labour Organization recognized that India's social protection coverage had increased from 19% in 2015 to 64.3% this year, and the new statistics are now included in the ILOSTAT database. This was covered by india Herald on june 12.
"With the increased ₹5 lakhs cap, more advanced claims will now be eligible for auto-settlement, which will process them three days after they are submitted. In a statement released tuesday, the government said, "This increased limit and quicker access to funds will help members get timely financial support when they need it most."
At a ceremony on september 17 to commemorate the 100 days of the Modi government's third term, Mandaviya first announced the modification in the cap, which would take effect on Tuesday.
According to the minister, when the feature is implemented, consumers would have the choice to choose an employee's provident fund (PF) account in addition to standard savings deposits while interacting at an ATM. After that, the user can deal with the Employees' Provident Fund Organization (EPFO), the state-run retirement fund manager, and withdraw appropriate amounts without having to apply.
"The PF account will be integrated into ATMs, and an employee will be able to directly withdraw funds as per eligibility," said Mandaviya.
The minister stated that efforts were underway to make this capability accessible across banks, although he did not specify when this function would be implemented.
News agency PTI quoted an unnamed senior official as stating that a certain proportion of a PF fund will be frozen and made available to the account holder's bank account, which can then be withdrawn using methods such as UPI or ATM debit cards.
Some back-end software integrations are still being worked out, the news agency reported, with the official explaining that EPFO, which does not have a banking licence, cannot allow members to withdraw money directly from their funds.
According to an official, the goal is to provide "PF functionality" in debit cards and ATMs as bank accounts, Aadhaar, and PF accounts are already connected. In order to assign a uniform account number to each employee, the EPFO has mandated that subscribers link their PF accounts to their biometric identification, Aadhaar.
For around 70 million salaried Indians, provident funds offer a safety net and retirement income. It is frequently the main source of working people's lifetime savings.
All businesses with 20 or more employees are required by the PF Act to register with the EPFO. The law mandates that 12% of an employee's base pay be contributed by both the company and the employee to a corpus overseen by the EPFO.
During specific financial situations, such as medical treatment, a home purchase, or a family marriage, an employee may take out a portion of their PF assets.
"Once the ATM feature is up and running, users won't have to apply for advances and fill out additional papers. Direct withdrawals will be automatically permitted by the ATM based on eligibility, Mandaviya stated.
The action is a component of a reform of the retirement funds organization, which has been hampered by convoluted processes and holdups in processing workers' claims.
One of the most significant recent changes is that employees no longer need to obtain approval from and attestation from their HR department in order to withdraw or settle claims. Both of these procedures are now entirely conducted online.
According to the minister, two more months will be needed to complete the revamp of the EPFO's website, back-end, and gateway for essential services.
According to the minister, who was recently in Geneva for a global labor conference, the international Labour Organization recognized that India's social protection coverage had increased from 19% in 2015 to 64.3% this year, and the new statistics are now included in the ILOSTAT database. This was covered by india Herald on june 12.
click and follow Indiaherald WhatsApp channel