In Mumbai region, 3 lakh draw Rs 1,300 crore from EPF under Covid category

MUMBAI: Around 3.3 lakh employees’ provident fund (EPF) subscribers in the Mumbai region have tapped their accounts since the lockdown was announced in March-end to withdraw nearly Rs 1,360 crore under a special ‘Covid-19’ category created to meet financial exigencies generated due to the pandemic.
The government has amended the EPF scheme to allow withdrawal of funds under the Covid category. This allows a member to withdraw an amount equal to three months of basic and dearness allowance or 75% of the credit balance in the account, whichever is lower.
According to the data available with TOI, withdrawals under the Covid category comprised 70-80% of the total applications received by the Employees’ Provident Fund Organisation offices in the Mumbai region. Applications under the Covid category were filed on the EPFO website or on its mobile app. During the lockdown, EPFO offices accepted and settled claims online under other regular categories too. Though the average time taken to settle claims under the regular categories is around 25 days, they were done in three days in most Covid cases.
50% establishments haven’t contributed to EPF in 3 mths
Data from the two zonal offices that cover the Mumbai Metropolitan Region shows the one at Bandra settled 2.5 lakh claims since the lockdown, 1.6 lakh of which were under the Covid category and totalled Rs 879 crore. At the Thane office, of the 2.2 lakh claims, 1.7 lakh were under the category and totalled Rs 481 crore.
The Bandra office has a total of 34 lakh EPF subscribers, while Thane, which has a larger jurisdiction, has 1.5 crore accounts.
Although the average withdrawal comes to around Rs 41,000, senior officials say a liquidity crunch due to the lockdown has seen many people dip into their savings. “Applications under the Covid category were prioritized to ensure that relief could be extended to those who were affected. Claims were settled in up to three days in most cases,” said a senior EPFO official speaking on the condition of anonymity as he is not authorized to address the media.
Data also shows claims under the Covid category were at their peak in April, probably due to the health-related panic as well as salary cuts or job losses in several offices.
“The sudden lockdown had created panic. In several organisations, salaries for the month of March, too, were not processed due to the lockdown as there was a shortage of staff, which led to a liquidity crunch. In order to be crisis-ready, people dipped into their savings and thus we saw more applicants seeking withdrawal in April. Their numbers dipped in May and June,” said the official.
Senior officials said another trend that is an indicator of the lockdown’s impact on the economy is that close to 50% of establishments have stopped remitting their PF contributions since the past three months.
“A preliminary check shows that smaller sectors such as cafes, restaurants, small shops and businesses have stopped paying their PFs since March. These were the most affected sectors. Lay-offs too have been high in these sectors,” said a senior EPFO official.