EPFO empanels 15 more banks for direct payment of collections

New Delhi, April 1 (IANS) The EPFO on Tuesday entered into agreements with 15 additional banks, both in the public and private sector, to enable direct payment of nearly Rs 12,000 crore in annual collections and provide direct access to employers who maintain their accounts with these banks, to pay their monthly contributions. 

The EPFO has already empanelled 17 banks, and with the addition of these 15 banks, the total number has gone up to 32 banks.

The agreements with the banks were signed in the presence of Union Labour & Employment Minister Dr Mansukh Mandaviya, and Union Minister of State for Labour & Employment, and MSMEs Shobha Karandlaje.

Mandaviya said that with nearly 8 crore active members and more than 78 lakh pensioners, the EPFO provides benefits that ensure social security for millions.

He expressed happiness that the EPFO is offering an interest rate of 8.25 per cent to its beneficiaries. The participation of banks in service delivery would further enhance the efficiency of the EFPO and improve good governance, he added.

He further stated that in the Financial Year 2024-25, EPFO settled a record of over 6 crore claims, which is a 35 per cent increase compared to the 4.45 crore claims settled in the previous year (2023-24).

Mandaviya said that a significant milestone was also marked with the introduction of the Centralised Pension Payment System.

"This system will benefit over 78 lakh pensioners, enabling them to receive their pensions in any bank account across the country. Previously, pensioners were required to have an account in a specific zonal bank; this compulsion has now been removed," the Minister said.

Mandaviya also touched upon the significant reforms introduced by the EPFO recently. "The auto claim settlement process is a major reform which has improved claim processing speed. With auto-processing, claims are now being settled in just three days. In FY 2024-25, we settled 2.34 crore claims under this system, a 160 per cent increase from the 89.52 lakh claims in 2023-24," he said.

The EPFO, one of the largest social security organisations in the world and has ollected over Rs. 3.41 lakh crore in contributions remitted by employers through 1.25 crore electronic challan cum returns till 20th March 2025.

The empanelment of new banks will bring seamless integration of EPFO collections/dues payments by employers, further reducing the need for an aggregator payment mechanism for employers, which will help both the EPFO & employers to reduce transactional delays and thereby, strengthen operational efficiency. This will yield financial benefits for EPFO, as dues remitted through empanelled banks will be available for investment on T+1 day, compared to T+2 day through an aggregator. This will also significantly reduce the costs to the EPFO payable for name validation of members' accounts held in non-empanelled banks.

This initiative will enhance both the Ease of Doing Business and the Ease of Providing Service for employers, and it will also translate into benefits for members, reducing lags in payments of their contributions. Further, it will also help employers to interact with these banks directly for grievances related to the payment of dues.