EPFO Expands Banking Network: 15 New Banks Added for Seamless Direct Transactions

The Employees' Provident Fund Organisation (EPFO) has taken a significant step towards enhancing efficiency and user experience by partnering with 15 additional banks. This move expands its total banking network to 32 banks, facilitating direct payment of employee contributions and streamlining transactions for employers. This initiative is part of EPFO's broader strategy to improve operational efficiency, reduce transaction delays, and enhance user satisfaction for both employers and members.

Background on EPFO's Banking Expansion

EPFO, one of the largest social security organizations globally, provides benefits to nearly 8 crore active members and over 78 lakh pensioners. The organization has been continually evolving to simplify processes and improve services. By empaneling more banks, EPFO aims to increase the ease of doing business for employers while ensuring an enhanced ease of living for its members.

Details of the New Banking Partnerships

On April 1, 2025, EPFO entered into agreements with 15 new banks, including both public and private sector institutions. These banks are HSBC Bank, Standard Chartered Bank, Federal Bank, IndusInd Bank, Karur Vysya Bank, RBL Bank, South Indian Bank, City Union Bank, IDFC First Bank, UCO Bank, Karnataka Bank, Development Bank of Singapore, Tamilnad Mercantile Bank, Development Credit Bank, and Bandhan Bank. This addition brings the total number of empanelled banks to 32, building upon the existing 17 banks that were already part of the network.

Benefits of the Expanded Banking Network

The expansion of EPFO's banking network is expected to have several key benefits:

• Faster Fund Availability: Contributions remitted through empanelled banks will be available for investment on T+1 day, as opposed to T+2 days when using an aggregator. This accelerated availability of funds enhances EPFO's investment opportunities and financial efficiency.

• Reduced Transaction Costs: Empanelled banks will handle member account validation directly, reducing EPFO's transaction costs related to account verification.

• Simplified Employer Transactions: Employers can now pay monthly contributions directly through their banking partners, reducing reliance on third-party aggregators and streamlining transaction processes.

• Enhanced Ease of Doing Business: By integrating more banks into its network, EPFO improves the efficiency and convenience for employers to manage their EPFO-related transactions.

• Faster Claims Processing: EPFO has seen significant improvements in claim processing speeds with the introduction of auto-claim settlements. In FY 2024-25, over 2.34 crore claims were settled under this system, marking a 160% increase from the previous year.

Reaction from Union Minister Mansukh Mandaviya

During the signing of the banking agreements, Union Minister Dr. Mansukh Mandaviya emphasized the importance of EPFO in ensuring social security for millions of Indians. He highlighted that EPFO is committed to continuous improvement, aiming to make its services as seamless as those of banks. The Minister also expressed satisfaction with the current interest rate of 8.25% offered to EPFO beneficiaries and noted the significant reforms recently introduced, including the centralised pension payment system.

Centralised Pension Payment System

One of the notable reforms introduced by EPFO is the Centralised Pension Payment System. This system allows over 78 lakh pensioners to receive their pensions in any bank account across the country, eliminating the earlier requirement of maintaining an account with a specific zonal bank. This initiative has significantly enhanced the ease of living for pensioners and streamlined pension disbursements.

Digital Transformation and Future Plans

EPFO's expansion of its banking network is part of a broader digital transformation strategy. The organization aims to evolve towards EPFO 3.0, a vision that seeks to make EPFO services as efficient, accessible, and seamless as those offered by banks. This transformation includes enhancements to claim processing, pension disbursement, and overall member experience, ensuring both "Ease of Living" for members and "Ease of Doing Business" for employers.

Impact on Annual Collections

The empanelment of these additional banks is expected to facilitate direct payments worth nearly Rs 12,000 crore in annual collections. This integration will not only streamline transactions but also reduce the financial burden associated with using third-party aggregators for payment processing.

Conclusion

EPFO's decision to expand its banking network reflects its commitment to improving operational efficiency and enhancing user experience. By partnering with more banks, EPFO is poised to play an even more pivotal role in shaping India's social security landscape, aligning with broader national goals such as "Ease of Doing Business" and "Ease of Living." This strategic move underscores EPFO's vision for a streamlined, efficient, and member-centric service delivery model.

In conclusion, the integration of 15 new banks into EPFO's network marks a significant step in modernizing India's social security infrastructure. As EPFO continues to evolve and expand its services, the benefits to its vast base of active members and pensioners are expected to grow, contributing to a more robust and accessible social security framework for millions of Indians.