RBI to Launch Beneficiary Name Verification for RTGS and NEFT by April 2025
RBI to Launch Beneficiary Name Verification for RTGS and NEFT by April 2025
The Reserve Bank of India announced on Monday that it will introduce a facility for looking up beneficiary bank account names for both the Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems. This feature is set to be launched by April 1, 2025, and will allow senders to verify the beneficiary’s name prior to initiating any transfers, which will greatly minimize the chances of errors and fraudulent activities.
At present, services like the Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) provide users the option to confirm the beneficiary’s name before finalizing a transaction. With this new feature, RTGS and NEFT will adopt a similar capability, ensuring that the sender’s provided name aligns with the beneficiary’s account information, as mentioned in an official circular from the central bank.
Furthermore, the RBI has directed the National Payments Corporation of India to create and implement this verification feature, which will further strengthen the security and dependability of digital transactions in India.
Once it is implemented, the new feature will be available to all banks participating in the RTGS and NEFT systems.
Customers will be able to access this feature through multiple channels, including internet banking and mobile banking platforms. Additionally, customers who visit their banks’ branches to carry out transactions will also have the option to verify beneficiary account details before their payments are processed.
Key Benefits
The implementation of the beneficiary name look-up facility is designed to:
- Enhance Transaction Accuracy: Remitters will have the ability to verify the recipient’s account name before making payments, which will help reduce errors caused by incorrect account information.
- Improve Security: By checking account details in real-time, the likelihood of fraudulent transactions or incorrect transfers will be significantly lowered.
- Streamline Processes: This feature will add an extra layer of assurance, similar to the functionalities already present in platforms like UPI and IMPS.
According to the circular, the Reserve Bank’s initiative is part of its continuous efforts to enhance the digital payment ecosystem in India. As more individuals turn to online banking services, these measures are anticipated to bolster trust and confidence in digital banking systems, thereby encouraging wider adoption of secure and efficient payment methods.
On Monday, the Delhi High Court instructed the Reserve Bank of India (RBI) to quickly establish a system that verifies the names of beneficiaries for RTGS and NEFT transactions. Justice Pratibha M. Singh emphasized that such a system is crucial to prevent cyber fraud, cautioning that any delays could lead to thousands of consumers unknowingly making payments to fraudulent beneficiaries. The court also required that this system be implemented across all banks.
This ruling was issued during hearings related to a case involving fraudulent websites that misuse trademarks to trick consumers.
