‘Beneficiary Name Look-Up’ Facility For RTGS And NEFT Transactions To Start Soon, Check Its Start Date

To make the Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) transactions more secure and transparent, the Reserve Bank of India (RBI) has introduced the ‘Name look-up’ feature for these services. As per the notification dated December 30, 2024, the RBI has instructed participating banks to make this feature available to customers by April 1, 2025.

The circular states, “Banks which are participants of RTGS and NEFT Systems, shall make this facility available to their customers through Internet banking and Mobile banking. The facility shall also be available to remitters visiting branches for making transactions.”

Currently, senders cannot verify a beneficiary’s name when transferring funds via RTGS or NEFT, which occasionally results in funds being sent to incorrect accounts and facilitates fraudulent activities. While name look-up functionality is already part of the Unified Payments Interface (UPI) and Immediate Payments Service (IMPS), it was absent in older modes (RTGS and NEFT) of money transfer.

How Will ‘Beneficiary Name Look-Up’ Facility Work?

Under the name look-up facility, beneficiary details will be retrieved from the bank’s core banking system (CBS) using the beneficiary’s account number and IFSC code.

The circular specifies that customers can access this facility through internet banking, mobile banking, or by submitting physical transaction forms at bank branches. In that case, the bank employee will verify the beneficiary’s name before completing the transfer.

People typically use NEFT and RTGS services for high-value transactions. However, despite the high-value transactions, they lacked a mechanism to confirm the beneficiary's name at the time of transferring money. It was a lacuna, and RBI has been receiving requests to introduce the facility in these two popular modes for high-value transactions.

Responding to these demands, RBI proposed a ‘beneficiary account name look-up’ feature on October 9, 2024. The initiative aims to ‘increase customer confidence’ and reduce the ‘possibility of wrong credits and frauds,’ according to the RBI.

The announcement is now in the implementation phase. “All banks who are direct members or sub-members of RTGS and NEFT are advised to offer this facility no later than April 1, 2025”, reads the notification.

The facility will be free, and users don’t have to pay any charges for it.

How Will It Help The Users?

The sender/remitter will be able to check the beneficiary's name before transferring the funds. This will significantly reduce the risk of fraud and transfers to mule accounts, which are often used in fraudulent schemes. By showing the receiver’s (beneficiary) name at the time of initiating a transaction, the facility will help safeguard users and enhance trust in the system.

The RBI has directed all banks, whether direct members or sub-members of the RTGS and NEFT systems, to implement the feature by April 1, 2025.