The smoother and easier way of transferring EPF money

The smoother and easier way of transferring EPF money

The process of transfer of Employees Provident Fund money is not smooth and according to VP Joy, central provident fund commissioner, Employees Provident Fund Organisation (EPFO), the delay is primarily due to the multiple bank accounts held by regional provident offices. “The transfer can take months because the money in the employees account has to be transferred from the bank account held by a regional provident fund commissioner’s (RPFC’s) office of the previous employer to the bank account held by the RPFC of the new employer,” he said.

To reduce the turn around time of such transfers, EPFO has decided to discontinue the practice of multiple bank accounts and keep just one. This is likely to get operational by the end of this week. “We have now abolished individual State Bank of India (SBI) receipt accounts and have only one bank account for the EPFO. The money is tagged to the employee’s UAN and as she changes jobs, only the account details get transferred to the new EPF office. There is no physical movement of EPF money,” he explained.

Under the one-bank-account system, transfer of money is no longer needed. EPFO simply tags the new provident account to your UAN and the contributions continue to happen. Of course, the process of transfer still remains the same: you fill up Form 13 which the current employer sends to the previous employer for verification. But in a month’s time even that is expected to get better.

EPFO plans to do away with form-filling exercise that is needed to initiate a transfer. “This facility will be applicable for those employees whose UAN (Universal Account Number) is seeded with Aadhaar. Through this we should be able to cut the transfer time to about five days,” added Joy. “The employer will just take your UAN and register you as an employee digitally with the EPFO. The RPFC of the previous employer will update the account history tagged to this UAN and the transfer is complete. Since KYC (Know your customer) can be processed through the UAN, we have eliminated the verification process by the former employer and also the formfilling exercise completely.”

The facility of auto transfer has been a long-awaited step. “Even as UAN was launched, the process of transfer was never automatic although it should have been—since UAN allows for seamless account portability. Now, EPFO has centralised the database so information can move in real time between the RPFs, which in turn will help in the autotransfer,” said Madhu Damodaran, head, legal operations, Simpliance, a labour law compliance software firm.

The path that EPFO is walking on is to de-link the employee’s PF account from the employer completely and eliminate the role of the employer in the transfer process. However, Amit Gopal senior vice-president, India Life Capital Pvt Ltd, said, the EPFO needs to get an effective system for data correction.

EPFO's RECENT INITIATIVES

Self-declartion replaces certificates for portal

UAN eases account portability,reduces employer -employee disputes

Transparency through mobile platform with live updates and alerts

Withdrawalup to 90 percent of corpus for housing

A real-time default managemenmt system to curb delays by employers

The Business Standard, New Delhi, 03rd October 2017

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said. Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm

Credit card spending growth declines on RBI gaze, stress build-up

Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem. “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and

CA Online

Search This Blog