The PF department, startled by these two separate findings made over the last few days, has swung into damage-control mode, issuing strict instructions to field offices to fix responsibility for these lapses, correct the spectre of negative balances and ensure that no fake claims get through the system.
But the 8.15 crore formal sector employees with PF accounts should be worried, especially if they have switched multiple jobs in recent years but failed to withdraw or transfer the PF balances, or if an ex-employer has shut down in recent years.
Employees' Provident Fund Organisation (EPFO) chief vigilance officer Sanjay Kumar has flagged an internal investigation that has found fraudulent withdrawals, orchestrated in accounts that have not had fresh inflows for years. Such claims managed to evade all checks and balances in the system and PF staffers were pressured using 'all possible means' to clear these fake claims swiftly.
Insiders seem to have colluded with the scamsters in identifying dormant accounts and actively facilitating their loot. This also brings into question the Know Your Customer or KYC norms followed by banks. "The claims were settled by putting pressure on dealing hands/office by all possible means. In all these cases, the amount settled had been sent through NEFT (electronic funds transfer) in the bank accounts opened with forged identity," Kumar has said in a letter warning EPFO's field offices about the scam. "This has been the modus operandi that has been used in the EPF office over the years, but we have said this is unacceptable and initiated action against it," said a senior official.
He, however, said that all such fraudulent withdrawals may not be criminal in nature as some employers often create PF accounts for their relatives showing them as employees.
In April 2011, the EPFO stopped crediting interest on PF accounts that hadn't seen fresh contributions for three years.
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