The Employees’ Provident Fund Organisation (EPFO) is gearing up to streamline the clearance of unclaimed funds in dormant accounts by introducing an automated settlement system. This new process will directly transfer the unclaimed balances in such accounts to subscribers’ Aadhaar-linked bank accounts, eliminating the need for manual claims. Initially, approximately 25% of Aadhaar-verified inactive accounts are set to undergo processing, facilitating beneficiaries in receiving their pending funds smoothly.
The initiative is anticipated to encompass roughly 8 lakh Aadhaar-verified inactive accounts, collectively valued at around Rs 5,200 crore. Notably, among these accounts, nearly 14,000 hold unclaimed balances exceeding Rs 5 lakh, while about 38,000 accounts have balances ranging from Rs 1 lakh to Rs 5 lakh. Additionally, another 41,000 accounts contain amounts varying from Rs 50,000 to Rs 1 lakh.
The Central Board of Trustees has greenlit the automatic settlement of inactive accounts with balances up to Rs 1,000, enabling the direct transfer of funds to registered bank accounts. While reports have surfaced regarding this development, the EPFO is yet to release an official statement on the matter. An EPFO account is classified as inactive once it ceases to earn interest, typically after a member retires at 55 and ceases contributions for three consecutive years.
As of February 2026, the EPFO had approximately 31 lakh inactive accounts with unclaimed deposits amounting to Rs 10,181 crore. Notably, among these accounts, nearly 7 lakh are more than two decades old, while 18 lakh fall within the 10–20 year bracket. Furthermore, around 13 lakh accounts have remained inactive for a period ranging between 5 and 10 years. In a related development, EPFO recently announced an interest rate of 8.25% on employees’ provident fund (EPF) deposits for 2025-26, maintaining the rate for the second consecutive year.
Accounts that remain inactive for 36 months cease to accrue interest and are considered dormant, as per EPFO regulations.
