The Ministry of Labour announced a significant decision with regards to the Employees' Provident Fund Organisation on Monday with the unveiling of a pilot project for direct refunds of 6 lakh inoperative accounts, according to NDTV.
Inoperative accounts with deposits of Rs 1,000 or less will be refunded without any paperwork, as per the new programme. This means that account holders don't need to submit any sort of application to avail refunds.
The EPFO will automatically deposit the requisite funds into their bank accounts. According to the latest data, there are six lakh operative accounts with deposits of less than Rs 1,000 out of a total of 3.1 million inoperative accounts. These 6 lakh accounts hold approximately Rs 600 crore in deposits. The 3.1 million inoperative accounts hold Rs 10,000 crore in total deposits.
Money will be deposited immediately into those accounts linked to Aadhaar under the new programme. The remaining accounts are set to be distributed gradually. If the pilot project is successful, the same will be implemented for the remaining 2.5 million inoperative accounts
An EPFO account is considered "inoperative" if it does not see any activity for three years.
The ministry is currently undertaking the process of settling all EPF0 accounts that are inoperative and paying back all the eligible beneficiaries, said the source.
The labour ministry is also developing project EPFO 3.0, a digital transformation scheme, which intends to enhance services to members and establishments by implementing Core Banking System-powered facilities.
This plan is configured around streamlining processes and cutting down on paperwork, making it simpler for members to handle their social security accounts, and ramp up claim processing and manage all member services via a consolidated platform.
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