The federal government on Thursday revealed 2 significant reforms to reduce case negotiation procedure for staff member provident fund (EPF).
Members needed to equip a chequebook or a financial institution passbook to obtain the case. You do not need to do it any longer. Also, you no more call for the company’s authorization to connect your savings account with your Universal Account Number (UAN).
Earlier, to send an EPF case, you required to obtain your financial institution confirmation performed, without which the insurance claims application was declined. This needed you to either submit a financial institution cheque having your name published on it or a passbook with photo and confirmed by a financial institution supervisor.
“A lack of it would lead to rejection of your application. It has been among the most common reasons for rejections,” stated Kunal Kabra, creator and president ofKustodian life, a technology company giving insurance claims resolution throughout EPF, financial, wills, and depends on. “Doing away with this requirement is a welcome move.”
“Since bank KYC is already a mandatory requirement, providing a cancelled cheque at the time of claim only added to redundancy in the system,” he said.
Clarifications on Bank Verification and Fraud Protection
Adarsh Vir Singh, founder of social security consulting firm Nidhi Niyojan, said that there is no clarity whether the authentication of the initially embedded bank account number as KYC requirement will continue or has been dispensed with.
He also highlighted that the Employee Provident Fund Organization (EPFO) needs to follow a process to protect subscribers against fraudulent claims if it is doing away with the bank verification procedure.
“The EPFO needs to define what process will be followed to protect the subscribers’ money not getting siphoned off fraudulently considering that EPFO used to cross-check the bank account details with the NPCI database to confirm the linkage between the account and the UAN,” said Singh.
Similarly, earlier if one had to seed their bank account with their UAN, they needed employer’s permission to go about it. It was a hassle and has been done away with. “This too is a welcome change as it never made sense to involve an employer in approving your bank account at the EPFO,” said Kabra.
The first reform is expected to benefit 8 crore EPF subscribers, while the second will benefit 15 lakh EPF subscribers, tweeted Labour minister Mansukh Mandaviya.
Among other procedural reforms that need EPFO’s attention is the father’s name mismatch issue between Aadhaar, PAN and EPFO. “If Aadhaar and PAN are linked to the UAN, matching the father’s name with PAN again while withdrawal shouldn’t be a need in the first place,” stated Kabra.
