The answer is not as simple as that, however. EPFO is an enormous website and its traffic is limited by the number of registered companies and members. While real-time subscriptions do not happen on a daily basis, they are not uncommon either. If this is the case, you should take some measures to increase the speed of the site. You should also keep in mind that exits are usually done through an employer account, not an individual account.
EPFO is a custodian of billions of rupees of the salaried class
Currently, the Employees Provident Fund Organisation (EPFO) has virtually no accountability to the public and is largely untouched by reform. The Provident Fund Act (PF Act) was passed around the time of Indian independence, but the institution continues to have a medieval mindset, through processes and people. It is time for a change.
The EPFO is a ticking time bomb waiting to explode. Unclaimed money in PPF accounts is transferred to the Senior Citizens Fund, where no one is permitted to withdraw the money. The PF organization is currently not paying interest on the money it holds. It is possible that this is an attempt to create perverse incentives not to allow people to withdraw their money.
Fortunately, the EPFO has recently launched a mobile app for employees to check their EPF balances. This app rides on the mobile application craze in the Indian market. Using this app, employees can check their EPF balances and generate an account statement. The app is available for Android users, but will soon be released for other platforms.
The government has also made the application process simpler for employees by requiring employers to sign off on their PF accounts. This process is known as the Attestation Process and the employer will receive notification via email or through the employee’s EPF portal. Once the employer has verified the information, the application will then be sent to the EPFO. While completing the application, a Captcha code will appear on the screen. To submit the application, you must enter this code and click on the “GET PIN” button. Once you have done so, you must accept the terms and conditions of the application.
For employees earning up to Rs 15,000 a month, they must maintain an EPF account. The EPFO will deduct 12% of basic pay as an employer contribution. A portion of that 24% is remitted to the Employees’ Pension Scheme of 1995. The interest rate is set annually by the EPFO and is determined based on market conditions and vetted by the finance ministry.
It has almost no accountability to the public
One of the most important issues facing the small savings scheme sector is the lack of transparency in the website of EPFO. Despite projecting itself as an organization that protects the interests of the small savings sector, the website of EPFO is riddled with loopholes. This includes the web-based KYC authentication system, which has several weaknesses. This is why there has been little to no accountability to the public for the performance of EPFO.
The top brass of the EPFO need to behave like a service provider and stop being a scapegoat for ill-gotten gains. EPFO has stated that it will focus on increasing the KYC process to prevent fraudulent withdrawals. However, this has not stopped insiders from cloning the PF accounts of daily wage earners and siphoning off crores of rupees.
The website also has virtually no accountability to the public, and is inaccessible for most of the country’s youth. They could potentially become entrepreneurs or employees, but they need information about EPFO facilities. In addition, they might want to know if their savings plan is tax-free. And, of course, there is a slew of other problems related to the EPFO website. These problems have to be addressed and improved before the public can get the full benefits.
Despite being the custodian of millions of salaried class dollars, the EPFO website has virtually no accountability to the public. This means that poor savers face challenges transferring their funds. And EPS is currently undergoing several court battles with workers. With the government’s support, the pension scheme has finally been overhauled and amended. The latest change is that an employee earning Rs15,000 per month will not be required to allocate part of their employer’s PF contribution to EPS.
It invests in the bourses
The Employees’ Provident Fund Organisation is set to increase its investment in Exchange Traded Funds (ETFs) to 10% of its total investible income for the current financial year. This move has been largely opposed by trade unions. The fund is expected to invest nearly Rs 13,000 crore in the stock markets this year. This move comes as many investors look for safer investments. The EPFO has a massive fund of around Rs 1 trillion and is looking to increase its investment in the stock markets.
The EPFO has also made a decision to park about five percent of its incremental deposits in ETFs. Besides, the EPFO plans to invest up to 15 percent of incremental deposits in shares of body corporates listed on stock exchanges and with a market capitalisation of Rs 5,000 crore or higher. However, this decision has not been formally announced yet. The government is likely to face stiff resistance from trade unions, which would make the move all the more problematic.
However, the Finance Ministry has argued that the surplus was artificial and had arisen as the subscribers’ accounts were not updated. This opposition was based on the report of the Comptroller and Auditor General, which said that there was no surplus with the EFFO interest suspense account. However, this does not mean that the EPFO is not pursuing the goal of deepening the corporate bond market. After nearly three decades of development and reform efforts, the corporate bond market is still struggling. The provident fund should have acted differently.
While EPFO has remained the second largest investor in Indian equities after LIC, it is still behind LIC. It is a large institution with over six crore subscribers. In the current fiscal, EPFO plans to invest approximately 15 percent of its total investible funds in equity ETFs. In addition to announcing plans to increase the fund’s investment in equities, the labour ministry has directed the EPF to increase its equity investments to as much as five per cent of its total investable fund.
It has prolonged periods of prolonged downtime without a single notification
The EPFO website has suffered frequent, long-term downtimes without notifying users. This has resulted in the inability to access online banking and may even lead to days of no access to your money. It is time that GOI looked into the issue and imposed strict SLA and compliance requirements. The EPFO should be held accountable for its inefficiency. A recent fiasco has exposed this problem and highlighted the misery of many poor middle class people.
It has failed to address fraudulent withdrawals issues
The top brass at the EPFO must act more like a service provider. It is not the fault of the website to fail to address fraudulent withdrawals issues, it is the failure of the EPFO itself. Unclaimed funds from PPF accounts are kept with the EPFO and not paid any interest, thus creating perverse incentives for people to not withdraw their money. It is not just the money that is at stake.
Although the Labour Ministry and the EPFO have taken the issue seriously, the website has failed to address these concerns. EPFO has taken appropriate action against officials who commit fraudulent transactions. It is clear that the EPFO relies heavily on IT-enabled systems to verify the identity of members and process their claims. However, it is not enough that the website is not secure, as most subscribers fall under the low-income category.
Another major flaw is the website’s downtime. The EPFO portal has been down for extended periods without any advance notice, and users have no way of knowing when they can expect it to be back up and running again. The downtime may even last days, without any notification at all. The EPFO website has also failed to address other issues related to fraudulent withdrawals. It is time for the EPFO to address these problems on its website.
If the EPFO wants to continue as the service provider for small savings schemes, it should focus on the KYC factor. The KYC factor is the fundamental basis of the financial system in India, and using Aadhaar to tag accounts is an important step. As a service provider, it should also focus on addressing the fraudulent withdrawals issue. This will prevent people from making fraudulent withdrawals and increase its overall credibility.