New Delhi: The Union labour ministry has decided to transfer balance lying unclaimed in more than 7 lakh inoperative Employees Provident Fund Organisation (EPFO) accounts directly into the bank accounts of EPFO members.
As on date, there are 31.86 lakh inoperative EPFO accounts where a total of Rs 10,903 crore is lying unclaimed.
To start with, the ministry has decided to return the amount lying in inoperative accounts, where the balance is less than Rs 1,000. There are 7.11 lakh such accounts where Rs 1,000 or less is lying unclaimed, some for as long as 20 years.
The total amount in this category (0 to Rs 1,000) is to the tune of Rs 30.52 crore.
Under the Employees’ Provident Fund Scheme, an individual’s account is deemed to be inoperative if there is no contribution or application for withdrawal or transfer from the account after the age of 58 years, that is 36 months after the retirement age of 55 years.
The decision was taken Monday by Union Minister for Labour and Employment Mansukh Mandaviya at a meeting to review EPFO’s work. Briefing reporters, Mandaviya said account holders won’t be required to do any paperwork to claim their money. “The EPFO will transfer the money to the Aadhaar-linked bank account of the person. In case Aadhaar seeding is not done, the EPFO will facilitate in getting the Aadhaar seeding done.”
He added that there was a feeling that people don’t apply to claim smaller balances lying in their EPFO accounts fearing the paperwork it would entail. “They think it’s a cumbersome process. So we decided that we will start by transferring the small amount up to Rs 1,000 to the bank account of the account holder or their nominee without any paperwork.”
Mandaviya said they will begin the process on a pilot basis from Monday onwards.
Based on how the pilot goes, the ministry will carry out the exercise for inoperative accounts where up to Rs 5,000 is lying unclaimed, followed by higher amounts. “This is just the beginning,” the minister said, adding that money lying in the inoperative account belongs to the people and should rightfully go to their accounts.
A labour ministry official said accounts generally become inoperative when someone switches jobs and opens a fresh EPF account with the new employer.
The EPFO’s decision comes in the backdrop of a Reserve Bank of India (RBI) proposal last May to amend rules to help banking customers access inoperative bank accounts with unclaimed deposits.
(Edited by Amrtansh Arora)
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