Over 1 lakh EPFO subscribers set for automatic PF refunds as Centre verifies dormant accounts: Report

More than one lakh Employees' Provident Fund Organisation (EPFO) subscribers are a step closer to receiving their long-unclaimed provident fund (PF) balances without filing any claim, as the Ministry of Labour and Employment has verified 1.18 lakh dormant accounts under a pilot project aimed at automating refunds.

According to a report by The Hindu BusinessLine, the EPFO has authenticated the details of 1.18 lakh subscribers and linked them with their active bank accounts, marking a key milestone before automatic refunds can begin.

The pilot project covers 7.11 lakh inoperative EPF accounts holding balances of ₹1,000 or less, with a cumulative unclaimed amount of ₹30.52 crore. Once the required technology platform is operational, eligible subscribers will receive their PF balances, along with applicable interest, directly into their bank accounts without submitting any application.

Software upgrade underway

To facilitate the initiative, the Centre for Development of Advanced Computing (C-DAC), under the Ministry of Electronics and Information Technology (MeitY), has been tasked with upgrading EPFO's technology platform.

The software overhaul is part of the EPFO 2.01 reform programme and builds on the Universal Account Number (UAN) system introduced to provide every EPFO subscriber with a unique identification number.

DO READ: Old EPF account lying inactive? New EPFO portal lets members trace and transfer PF balance

During the verification exercise, EPFO carried out a "penny drop" process for Aadhaar-linked dormant accounts to validate bank account details. The organisation also identified deceased account holders and updated subscriber records using data collected from banks.

Although the required subscriber information has been extracted and verified, the software changes needed to initiate automatic payments are still under development.

'System-generated claims'

A major technology upgrade involves introducing a "system-generated claim" feature.

At present, EPFO's digital platform only processes claims submitted by members. Under the proposed system, claims will be generated automatically for eligible subscribers, eliminating the need for individuals to apply for withdrawal of their dormant balances.

The technology integration is expected to be completed by the end of August, following which the automatic credit process is likely to commence, according to Ministry sources cited by BusinessLine.

MUST READ: EPFO rules 2026: Before buying a flat or repaying a home loan, read these PF withdrawal norms

Pilot may be expanded

The pilot project received approval from Labour and Employment Minister Mansukh Mandaviya on February 23, 2026, and is currently limited to dormant EPF accounts with balances of up to ₹1,000.

If the initiative is implemented successfully, the Ministry plans to extend it to the remaining 24.76 lakh inoperative EPFO subscribers whose dormant accounts hold balances exceeding ₹1,000.

Thousands of crores remain unclaimed

The pilot addresses only a small portion of the larger challenge facing the EPFO.

According to Ministry estimates, around ₹10,903 crore remains unclaimed across 31.86 lakh dormant EPF accounts accumulated over the past two decades.

MUST READ: Changed jobs? Don't withdraw your PF — transfer it instead. Here's why

An EPF account is classified as inoperative if it receives no contributions for 36 consecutive months, after which interest also stops accruing on the balance.

EPF savings can generally be withdrawn after retirement at the age of 58, permanent disability or after two months of unemployment. Partial withdrawals are also permitted for specified purposes, including medical treatment, higher education, marriage, home purchase or construction, and repayment of housing loans.

The proposed automated refund mechanism is expected to significantly reduce paperwork and physical intervention while helping subscribers recover their legitimate retirement savings more efficiently. If rolled out nationwide, it could become one of the EPFO's biggest digital reforms in recent years, complementing initiatives such as UAN-based portability, online claim processing and faster settlement of provident fund claims.

MUST READ: EPFO launches VISHWAS, 2026: One-time scheme to settle PF damages and penalty disputes