Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) offer a convenient way of receiving and sending money digitally. However, users often end up sending funds to the wrong beneficiary due to incorrectly entered details. The RBI has introduced a new facility to prevent such incorrect money transfers.
What Is RBI’s New Facility For NEFT And RTGS Users?
The Reserve Bank of India (RBI) has introduced a beneficiary account name lookup facility for RTGS and NEFT payments. The facility will help users in verifying the beneficiary’s name before sending or receiving money. The introduction of the feature is aimed at reducing the number of incorrect transfers.
The feature is available for Unified Payments Interface (UPI) and Immediate Payment Service (IMPS) transactions. The feature allows users to confirm the recipient’s name before making payments.
The Reserve Bank of India (RBI) said in a notification that the National Payments Corporation of India (NPCI) will develop the new facility. The feature will also be available for customers making transactions in bank branches.
How Does The Feature Work?
Users who conduct transactions via RTGS or NEFT will enter the beneficiary’s account number and the branch’s IFSC code and the beneficiary’s name will be displayed on the screen allowing the sender to confirm the details. Banks have been directed to implement this system by April 1, 2025.
Earlier in October 2024, former RBI Governor Shaktikanta Das highlighted the need for this facility.
“There have been requests to introduce such a facility for RTGS and NEFT systems. Accordingly, to enable remitters in RTGS and NEFT to verify the name of the beneficiary account holder before initiating funds transfer, it is now proposed to introduce a ‘beneficiary account name look-up facility,” Das said.
The implementation of the feature into the digital banking system is likely to lower the number of incorrect transfers, minimise cases of identity fraud and increase customer confidence in digital banking systems.
