Moneylife: Pune: ThuRs. day, 8 August 2024.
More than Rs. 54,657.87
crore is lying as unclaimed money in inoperative accounts of the employees'
provident fund (EPF), reveals information received under the Right to
Information (RTI) Act.
An application filed under the RTI Act by Aakash Goel, an engineer, management graduate and chartered financial analyst, unveiled significant amounts of unclaimed money lying in inoperative EPF accounts.
During the years 2015 and 2018, when the rules defined "inoperative" accounts as those which had been observed to be inactive or transaction-less for three consecutive year Rs. , the amount accumulated in such accounts has been revealed to be staggeringly high. Rs. 40,865.14 crore was accumulated in inoperative accounts at the end of FY15-16, Rs. 45,093.41 crore at the end of FY16-17 and Rs. 54,657.87 crore at the end of FY17-18.
In contrast, Rs. 1,638.37
crore was accumulated at the end of FY18-19; and Rs. 2,827.29 crore at the end
of FY19-20. Except for the drop noted in FY18-19 and FY19-20, these figures
highlight a substantial increase in unclaimed funds over the years.
Mr Goel believes that an amendment in the definition of "inoperative" accounts explains the dip noticed during FY18-19 and FY19-20. During this period, "inoperative" accounts were labelled only after retirement rather than an inactive or transaction-less period of three consecutive years.
Response to the RTI further revealed that amounts of Rs. 5,826.89 crore were paid to claimants from inoperative accounts in FY15-16; Rs. 5,246.91 crore was paid out in FY16-17; Rs. 3,618.56 crore was paid out in FY17-18 and Rs. 2,881.53 crore was paid out in FY19-20. These payments indicate efforts to settle claims from inactive accounts, though a significant portion still remains unclaimed.
According to a notification
issued by the department of economic affair (DEA), under the Union ministry of
finance (MoF), unclaimed money from EPF accounts should be transferred to the
senior citizens welfare fund (SCWF) after seven years. of remaining unclaimed. When this RTI was
filed, the amounts disclosed in the response had not been transferred to the
SCWF or the consolidated fund of India. The RTI response explicitly stated,
"No such amount is transferred to the senior citizen welfare fund or
consolidated fund of India from the inoperative accounts."
An application filed under the RTI Act by Aakash Goel, an engineer, management graduate and chartered financial analyst, unveiled significant amounts of unclaimed money lying in inoperative EPF accounts.
During the years 2015 and 2018, when the rules defined "inoperative" accounts as those which had been observed to be inactive or transaction-less for three consecutive year Rs. , the amount accumulated in such accounts has been revealed to be staggeringly high. Rs. 40,865.14 crore was accumulated in inoperative accounts at the end of FY15-16, Rs. 45,093.41 crore at the end of FY16-17 and Rs. 54,657.87 crore at the end of FY17-18.
Mr Goel believes that an amendment in the definition of "inoperative" accounts explains the dip noticed during FY18-19 and FY19-20. During this period, "inoperative" accounts were labelled only after retirement rather than an inactive or transaction-less period of three consecutive years.
Response to the RTI further revealed that amounts of Rs. 5,826.89 crore were paid to claimants from inoperative accounts in FY15-16; Rs. 5,246.91 crore was paid out in FY16-17; Rs. 3,618.56 crore was paid out in FY17-18 and Rs. 2,881.53 crore was paid out in FY19-20. These payments indicate efforts to settle claims from inactive accounts, though a significant portion still remains unclaimed.
It should be noted that
under the recently amended rules, accounts with no transactions defined as no
debit or credit of contributions other than the periodic interest for at least
three years. would be classified as
transactionless. These accounts would now be considered "inactive"
due to the lack of financial activity over this period. While accounts that
meet the existing criteria of the EPF scheme (three years. after the age of 55 years. ) will continue to
be designated as "inoperative".
Mr Goel predicts that the amended classification of inactive or transaction-less accounts, along with inoperative accounts, is bound to increase the amount of unclaimed money that lies with the Employees' Provident Fund Organisation (EPFO).
Mr Goel predicts that the amended classification of inactive or transaction-less accounts, along with inoperative accounts, is bound to increase the amount of unclaimed money that lies with the Employees' Provident Fund Organisation (EPFO).
.JPG)
.JPG)
