No plans to tap unclaimed LIC or inoperative EPFO funds for other purposes, says MoS Pankaj Chaudhary

The government on Tuesday said it has no proposal to utilise unclaimed funds lying with the Life Insurance Corporation of India (LIC) or money reserved in inoperative Employees' Provident Fund Organisation (EPFO) accounts for any purpose other than the existing mechanism, while reiterating that both organisations are continuing efforts to trace beneficiaries and settle pending claims.

In a written reply to the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said unclaimed insurance amounts and inoperative EPF balances are being handled under the existing regulatory framework, with no proposal under consideration to divert these funds for any other purpose.

The minister said LIC had ₹7,318.50 crore in unclaimed amounts as of March 31, 2026. The amount comprises ₹5,564.55 crore belonging to policyholders and ₹1,753.95 crore as income accrued on those unclaimed funds.

He further clarified that there are no unclaimed EPFO accounts. However, inoperative EPF accounts held ₹9,330.56 crore as of March 31, 2026.

Referring to the regulatory framework, Chaudhary said, “Under the Insurance Regulatory and Development Authority of India (IRDAI) Master Circular dated June 19, 2024, unclaimed insurance amounts lying unclaimed for more than 10 years are transferred to the Senior Citizen Welfare Fund (SCWF), while there is no proposal to utilise such funds for any other purpose.”

The government said LIC has taken several steps to help policyholders and nominees claim pending amounts. Policyholders can search for unclaimed funds through LIC's official website, while the insurer is reaching out through letters, SMS, local agents, Bima Sakhis and credit bureau agencies to trace beneficiaries. LIC has also participated in the Ministry of Finance's "Your Money-Your Right" campaign and is running multilingual awareness advertisements across the country.

For EPFO, the government said inoperative accounts have been categorised based on KYC status. It has also approved a pilot project for the automatic settlement of Aadhaar-verified inoperative accounts with balances of ₹1,000 or less. Under the initiative, the amount is credited directly to Aadhaar-seeded bank accounts without requiring fresh claims or documentation. The model is proposed to be expanded to higher balance slabs after due diligence.

The government added that EPFO is also conducting outreach through social media and Nidhi Aapke Nikat (NAN) 2.0 camps to help members identify and claim amounts lying in inoperative EPF accounts.