After ATM withdrawal plan for PF, EPFO & ESIC may enable e-wallet claims: How soon could it happen?

Subscribers of the Employees' Provident Fund Organisation (EPFO) and Employees' State Insurance Corporation (ESIC) may soon be able to access their claim settlements through e-wallets, a senior labour ministry official said on Wednesday.

Sumita Dawra, secretary in the Ministry of Labour and Employment, said the government has reached out to the Reserve Bank of India (RBI) to discuss the plan, which is aimed at simplifying access to retirement funds.

Responding to a query on enabling provident fund (PF) withdrawals through ATMs, Dawra told PTI, “This is an area of great interest for the insured person, for a contributor. How can I withdraw my money more easily.”

She noted that auto-settled claims are already credited directly to bank accounts, from which individuals can withdraw funds via ATMs.

“Now you are talking about how the claim can go directly to probably a wallet,” PTI quoted Dawra as saying. “We’ll have to work out some mechanism. So there we have started talks with bankers, and we are going to have a plan in place on how we can do this practically.”

How soon could it happen?

In comments made earlier this month to ANI, Dawra said the labour ministry was upgrading the information technology infrastructure to provide enhanced services to the Indian workforce.

“We have already seen some improvements. The speed and auto-settlement of claims have increased, and unnecessary processes have been removed. Our ambition is to bring the IT infrastructure of our EPFO to the same level as our banking system, which is globally comparable,” the official said, asserting that the claim settlement would even be faster from January 2025 with the upgraded version of IT infrastructure.

“We’ll make it easier so that claimants, beneficiaries, or insured people will be able to withdraw claims directly through ATMs, with minimal human intervention,” Dawra added, without specifying a timeline for implementation.

“Without the approval of the RBI, the banking regulator, the idea cannot be implemented,” the report quoted the person as saying, highlighting issues such as the frequency and limits of withdrawals that need to be resolved.

The report also indicated that implementing the idea of digital wallets to store claim amounts would require significant collaboration with banks and the RBI.

“These ideas, including issuing ATM cards, cannot be implemented without strong backing from the banking regulator and banks,” the source was quoted as saying.