By Trinath Lenka
Economist & Managing Director, W4W. EPFO 3.0 marks a decisive shift in India’s social security framework by transforming the Employees’ Provident Fund Organisation into a core banking–style, centralised, technology-led institution. This overhaul is critical as EPFO prepares to expand coverage beyond the organised sector to unorganised workers at scale under the new Labour Codes. With AI-driven multilingual access, UPI-based withdrawals, and simplified member services, EPFO 3.0 can significantly improve efficiency, transparency, and financial inclusion—provided execution timelines and cybersecurity safeguards are strictly maintained.
Detailed View:
EPFO 3.0 is being positioned as a complete revamp of EPFO’s IT and service delivery architecture, moving away from incremental upgrades to a future-ready system similar to what banks operate today. The new core banking solution will enable EPFO to handle rising transaction volumes, a growing member base, and multiple social security schemes seamlessly. A key benefit for members will be centralised operations, allowing grievances, claims, and service requests to be addressed from any EPFO office across India, irrespective of where the account is registered. This will substantially reduce delays and regional bottlenecks.
The transformation gains urgency as EPFO’s role expands under the Labour Codes. Beyond its nearly 8 crore active members and a corpus of about ₹28 lakh crore, EPFO is expected to play a larger role in administering social security for unorganised workers, possibly through a separate social security fund. Managing this scale efficiently is not feasible without a robust core banking–type platform. From an inclusion perspective, EPFO’s planned use of AI-based vernacular tools such as Bhashini is a positive step. Communicating in local languages will help bridge awareness gaps, especially for first-time contributors from the informal sector.
On the implementation front, EPFO is close to floating a tender to appoint an agency to build, operate, and maintain the new IT platform. This phase will be crucial, as system stability, data security, and scalability will define the long-term success of EPFO 3.0.
Meanwhile, EPFO 2.0 reforms are nearing completion. The UPI-linked EPF withdrawal facility, expected by April, will allow members to view balances and withdraw eligible amounts through the BHIM app, with initial caps likely set at ₹25,000 per transaction. The rationalisation of withdrawal categories and the requirement to maintain a minimum balance reflect a balanced approach between liquidity and long-term retirement security.
Equally important are the already-implemented self-correction facilities, which allow members to update personal details without employer verification—an overdue reform that significantly reduces friction and delays.
Conclusion : EPFO 3.0 has the potential to redefine India’s retirement and social security ecosystem by combining scale, speed, and inclusivity. If executed with discipline and strong governance, it can emerge as a model digital public institution supporting both formal and informal workers in the years ahead.