by July 4, 2012 0 comments

The solution has eased the process of EPF filing by organizations. They can now deposit money either through Internet or through any of the 7,350 designated SBI branches

The periodic EPF contributions are deposited exclusively at the authorized SBI branches (dealing branches) by organizations across India. To facilitate this process, over 7,350 dealing branches of SBI are mapped with 120 nodal branches which are in turn linked to 120 regional offices of EPFO, serving over 7.1 lakh establishments.

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The system of collecting the contributions was largely manually driven, with updations happening much after those contributions had been credited to the respective EPFO accounts. The need for an integrated system of accounting with in-built validations leading to a reliable MIS was observed. The lack of such a system resulted in various problems for all the stake holders–EPFO, the establishments, the employees, and to some extent the Bank as well. For instance, the challans of a given establishment were to be accepted only at specified branches which were in the geographic proximity of the concerned regional office and linked to it. Moreover, the organizations did not have the benefits of Core Banking facility available. Also, updation of employee accounts were not in sync with collections across counters, leading to delays in settlement of claims. Often employees faced problems on account of job changes as their contributions could not be accounted for in time.

The implementation

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The bank conceived a comprehensive solution for EPFO, fully integrated with itself, which necessitated fundamental changes in the way work flowed. The process was laid out in such a way that contributions from establishments are accepted only after the returns submitted by the establishments are validated by EPFO. The establishments are now required to file the monthly return for all employees on their rosters for the month, on the EPFO website “”. Alongside the monthly return, the establishments also upload the individual details of their employee contributions, known as the “luggage files”. A challan is generated by the website, once the file is successfully processed. There is a unique identifying number for the challan data called as Temporary Return Reference Number (TRRN). A soft copy of the challan is sent to the Bank’s central server. The establishment has now a choice of selecting from two modes of payment — Internet Banking or Payment at Branch counters. At branch counters, the representative of an establishment covered by EPFO, tenders the challan copy (printed earlier at his place) and cheque. The area restrictions, have been removed. Thus an establishment from Kolkata can make the payment by cheque, not only at Kolkata but from any of the designated 7350 branches across the country. The teller enters the TRRN (Temporary Return Reference Number) along with the amount on the screen. In case the data is found, then the challan details are displayed on the screen, else a message indicates the reason for non-availability of the data. The checker authorizes the challan upon funds realization, upon which the funds are transferred to the different accounts of EPFO maintained at the nodal (Link) branch. A “success” message for all the realized challans is sent to the EPFINDIA Server at the end of day. On realization of the “success” message, EPFINDIA Server sends the “luggage file”, meant to be delivered to each RO/SRO, to the Bank’s SFTP server. This is made available to the respective RO/SRO on an SFTP server who accesses them periodically for updating the respective employer and employee accounts along with the e-challan and e-statements which are also being made available to them.

What were the issues faced by EPFO that this project seeks to address?
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For the EPFO, controlling defaulters was a challenge. Returns for employees’ contributions were submitted by employers at the year end, resulting in processing delays at the RO/SRO of the EPFO which was compounded by employees switching jobs. For the Bank, the challans required a lot of data entry every time a credit was to be taken across the counters. This resulted in delays and irritation to all concerned. Erroneous (un-validated) data entry at times resulted in poor data quality leading to avoidable rounds of reconciliation. The e-statements, e-challans downloaded by the Nodal Branch of SBI were sent manually to the respective RO/SRO. Avoidable delays were experienced in submission of such reports.

Tell us about the key challenges faced during this deployment?
Arriving at an accounting arrangement that made for a robust reconciliation system was the foremost challenge. The short time of 30 days granted for the deployment was also a challenge. The database indices had to be changed for the new deployment while maintaining the existing indexing. All the authorized branches of SBI were to be enabled to accept contributions irrespective of the location of RO /SRO, to leverage on the Core Banking strength. The development of the functionality to handle “luggage files” which are received from the central server for distribution to the 120 RO/SROs was also a significant challenge. Training the frontline staff at 7350 branches in the short time was also a challenge.

How do you plan to enhance this implementation in future?
In future, we propose to simplify the payment procedure for non SBI customer by leveraging on alternate channels like ATM, etc.

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Tech Used

The EPFO application itself is hosted on SUN Solaris Servers, while the software has been developed in Java with Oracle as the database.

The Result

The bank benefited through a reduction in data entry ensuring efficient and faster service. 100% data quality has been made possible as the challans are generated only after validation by EPFO. The e-statements and e-challans are sent to respective SROs/ROs centrally, reducing the dependency over branches. Establishments benefit as no paper returns are required to be prepared and submitted to EPFO. The contributions are also credited to members’ account on monthly basis. Now employers can view the annual accounts slip for accounting year 2011-12 online. The EPFO office benefits through faster updation of the employee data, which used to be in arrears earlier. They can manage their funds better and in time. Plus, they can catch hold of defaulters within a short period of time. Overall, there is better transparency and faster reconciliation of accounts.

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