One major overhauling in the EPF system is going to be rolled out next year. Soon, the subscribers of EPF would be able to withdraw funds at the ATMs. Confirming the above news was the Union Labour Secretary Sumita Davra that said IT systems are already in development stages to allow the process, which should work by next year.
Current EPF Withdrawal Methods and Challenges
The current infrastructure for EPFO is online as well as offline. In terms of an emergency like home construction or medical need, children's education or marriage, the amount can be withdrawn to 90%. A process, however, still exists. The settlement times may have come down, but the instant access to funds will not still be possible with the present infrastructure. It will change with the new ATM facility which will overcome such problems.
How would the ATM withdrawal process be?
- The EPF ATM withdrawal process could involve introducing specialized PF cards, like a debit card for withdrawing cash.
- It could also allow a choice between linking an existing debit card with the EPF account for withdrawing directly from a linked bank account.
- So far, rumors hint that the withdrawal limit might be placed at 50 percent of the total PF amount, though updates are awaited to have a proper clarity.
Benefits through the ATM Withdrawal Facility
- Emergency Access: This might prove to be a savior in emergency situations by withdrawing funds immediately without delay or paperwork.
- Removing Manual Operations: People not aware of online operations often use to visit PF offices. The ATM facility would remove this, making the access to funds user-friendly.
- Convenience: It makes the withdrawal of funds easier, thus removing reliance on intermediaries and is thus more accessible.
Issues and Potential Disadvantages
Although an additional facility is helpful, there are also some drawbacks as mentioned below:
- Depletion of Savings: Liquidity will encourage frequent withdrawals for purposes not aligned with the long-term savings intention of PF accounts.
- Financial Frugality: Again, funds saved for retirement could be squandered well before retirement.
Conclusion
What is promising in the introduction of ATM withdrawal facilities for EPF funds is that this would promote accessibility and help better manage emergencies. Users should take responsibility to ensure their retirement funds continue to run long.
