Have an inoperative account? EPFO will refund your money
What's the story
In a major development, the Ministry of Labour and Employment has approved a pilot project to automatically refund money from small-balance inoperative Employees' Provident Fund Organisation (EPFO) accounts. The move is expected to provide relief to provident fund subscribers by simplifying the refund process. An EPFO account is deemed inoperative if there are no contributions or transactions for three consecutive years.
Refund mechanism
Refund process to be simplified
The new policy will see money from inoperative accounts with balances of ₹1,000 or less being directly transferred to the subscriber's linked bank account. Beneficiaries won't have to file any claim or submit documents to start the process. Currently, there are around six lakh inoperative EPFO accounts with such small balances. The initiative is expected to streamline fund settlement and reduce paperwork for millions of workers.
Expansion plans
Pilot phase and future expansion
The pilot phase of this initiative will target Aadhaar-linked accounts first, with money being transferred in phases. Official data shows there are a total of 31.86 lakh inoperative EPFO accounts with deposits worth ₹10,903 crore. Out of these, six lakh accounts fall under the pilot phase with balances of ₹1,000 or less. If successful, the scheme could be expanded to cover the remaining 25 lakh inoperative accounts as well.
Tech advancements
Digital upgrades at EPFO
The quick refund scheme is part of larger digital upgrades at EPFO, including faster online claim settlements and new single-window service centers across India. The organization is also working toward smoother KYC updates for subscribers. These measures are aimed at making the management of provident funds more efficient and less cumbersome for users.