The Employees’ Provident Fund Organisation (EPFO), custodian of the savings of over 270 million Indian workers, is preparing for a major IT overhaul. To modernize its digital platform and streamline management of provident fund, pension, and deposit-linked insurance schemes, EPFO has issued an Expression of Interest (EOI). However, the process has triggered strong criticism, with experts and industry voices raising concerns about transparency, fairness, and possible favoritism.
The Controversial CBS Requirement
The EOI mandates that bidders must have managed at least 100 million deposit accounts in a scheduled commercial bank and must have implemented a Core Banking Solution (CBS) in one. On the surface, this appears to be an experience-based qualification. But experts argue that the condition is irrelevant to EPFO’s mandate — which focuses on account maintenance, contribution management, and pension disbursement — functions entirely different from banking operations.
Experts Raise Red Flags
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Pawan Duggal, Cybersecurity and Digital Public Infrastructure Expert: “EPFO is not a bank. Its functions resemble a public service platform. Mandating CBS is technically unnecessary and strategically misleading.”
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Anoop Prakash Awasthi, Technology Advocate, Supreme Court: “The CBS clause signals bias. It appears designed not to find the best solution, but to benefit a particular service provider.”
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A former senior Finance Ministry official, speaking anonymously, warned that such restrictive conditions breach government procurement norms (GFR, CVC) and could limit competition, inflating costs.
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A leading IT firm working with government agencies remarked: “This is not just poor procurement — it’s anti-innovation and runs against the government’s own ‘Make in India’ and ‘Open Innovation’ policies.”
During the pre-bid meeting, major players including TCS, Infosys, Wipro, HCL, AWS, Finacle, and CIPL flagged concerns, arguing that the CBS requirement excluded many qualified companies. Yet EPFO retained the clause, dismissing objections.
Global Lessons and Alternatives
Worldwide, social security agencies have embraced simpler, more cost-effective solutions. For example:
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Brazil’s Dataprev adopted openIMIS, an open-source platform considered more scalable and economical than CBS.
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Sagitec’s Neospin software is widely used by pension funds across developed nations.
Experts emphasize that EPFO needs only integration with government APIs such as Aadhaar, e-Shram, and UPI — not banking infrastructure like SWIFT, NEFT, or ATM networks.
The Way Forward
Analysts argue that EPFO’s insistence on a CBS-based approach introduces unnecessary complexity and cost. A ledger-based modular system would be more relevant, scalable, and cost-efficient. A policy rethink could save hundreds of crores in annual maintenance and ensure better, affordable services for millions of EPFO members.
🔖 Tags: #EPFO #CBSControversy #DigitalIndia #SocialSecurity #PensionReforms #GovProcurement #OpenInnovation
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