Lakhs of EPF account holders are set to benefit from the decision of the Union Labour Ministry to refund balances lying in inoperative accounts under the Employees’ Provident Fund Organisation (EPFO).
According to a report by the Press Trust of India, the ministry’s decision will be applicable to EPF accounts with balances less than or equal to Rs 1,000.
There are over seven lakh such inoperative accounts with Rs 30.52 crore stuck in them, according to the report. The process to get the refund from such accounts will not require any paperwork.
The amount will be directly credited to the bank accounts linked to these inoperative EPFO accounts. “A total of Rs 30.52 crore stuck in over seven lakh inoperative accounts of the retirement fund body EPFO will soon be returned to the account holders or their legal heirs,” the report quoted a Labour Ministry source as saying.
According to EPFO norms, an account is classified as inoperative if it does not receive any contribution from the employer or the employee for more than 36 consecutive months.
There are over 31 lakh inoperative EPFO accounts with over Rs 10,903 crore lying idle. The ministry’s decision will be applicable only to accounts with an amount less than Rs 1,000.
As part of the ministry’s efforts to streamline the refund process, the amount will be sent to the bank accounts of EPF members whose accounts are linked with Aadhaar. For accounts whose owner has passed away, the amount will be given to the person designated as nominee or legal heir.
This drive is part of the ministry’s initiative to clean up EPF accounts. All inoperative accounts will be reviewed and settled in a phased manner while ensuring that refunds are made to eligible beneficiaries.
The Labour Ministry is working on Project EPFO 3.0, an initiative to digitally transform the services provided to subscribers. The focus will be on streamlining processes and reducing paperwork.
