The Employees' Provident Fund Organisation (EPFO) has begun a pilot program to automatically credit small amounts in Aadhaar-verified inoperative accounts. According to the latest parliamentary response from Union Minister of State for Finance Pankaj Chaudhary, this initiative aims to address the issue of dormant EPF accounts where contributions have ceased and remain inactive. The ministry clarified that EPFO does not maintain any 'unclaimed' accounts, but ₹9,330.56 crore is currently parked in inoperative EPF accounts. The central board of trustees has approved a pilot project for automatic settlement of Aadhaar-verified inoperative EPF accounts with unclaimed balances of ₹1,000 or less. Under the initiative, the amount is credited directly to Aadhaar-seeded bank accounts without requiring members to submit fresh claims or additional documentation. The government indicated the project is currently underway and may later be expanded to higher-value account slabs after due diligence.
As reported by the Finance Ministry in a written reply to Parliament, the Life Insurance Corporation of India (LIC) held ₹7,318.50 crore in unclaimed funds as of March 31, 2026. The breakdown shows ₹5,564.55 crore represents unclaimed policyholder money, while ₹1,753.95 crore comprises accrued income generated on those funds. To improve tracing efforts, LIC has hired a credit bureau agency to obtain updated addresses and mobile numbers of policyholders and beneficiaries. The corporation has also engaged development officers and Bima Sakhis to locate policyholders and assist them in settling claims. LIC has implemented comprehensive outreach measures including contacting policyholders through letters and SMS to their last registered address and mobile number, reminding them to complete required formalities. If policyholders cannot be reached through registered contact details, LIC follows up through its local branch network, agents and Bima Sakhis to trace them and complete claim settlement. The minister confirmed that LIC is carrying out outreach and awareness activities to identify eligible policyholders, nominees and legal heirs so that the money can be returned to them.
Both LIC and EPFO have implemented comprehensive outreach programs to identify eligible beneficiaries. LIC has introduced multiple measures including pin code-wise addresses shared with local agents who visit residences and make enquiries with neighbours, nearby shops and gram panchayats. The corporation has also published advertisements across the country in English, Hindi and 13 regional languages to encourage policyholders to claim their dues. For EPFO members, the Union ministry of labour and employment has identified and categorised inoperative accounts based on the availability of know-your-customer (KYC) details. EPFO has been conducting outreach programmes through social media and organising Nidhi Aapke Nikat (NAN) 2.0 camps to spread awareness about EPF services and inoperative accounts.
The Finance Ministry's disclosure comes as part of broader efforts to address unclaimed financial balances across government-backed institutions. According to the ministry's parliamentary response, the government is actively working to streamline processes for returning unclaimed funds to rightful beneficiaries. Under the Insurance Regulatory and Development Authority of India (IRDAI) regulations, insurance money that remains unclaimed for more than 10 years is transferred to the Senior Citizens' Welfare Fund (SCWF). For EPF accounts, there is currently no proposal at present to utilise the money lying in inoperative EPF accounts for any other purpose. The government has clarified that there is no proposal at present to utilise the money lying in inoperative EPF accounts for any other purpose. The government has maintained that such funds remain payable to their rightful owners and that efforts are underway to improve identification, verification and settlement through digital processes, including Aadhaar-based authentication.
