NEFT, RTGS update: RBI introduces name lookup facility to verify beneficiaries | Know details | Mint
Source: Live Mint
NEFT, RTGS update: The Reserve Bank of India (RBI) will introduce the beneficiary account name look-up facility for the Real Time Gross Settlement (RTGS) System and National Electronic Funds Transfer (NEFT) System.
The proposed facility will help rectify instances where the remitters transferred funds to the wrong beneficiary, thereby reducing the number of incorrect money transfers.
The Unified Payments Interface (UPI) and Immediate Payment Service (IMPS) systems allow the remitter to verify the recipient’s name before making the payment. Similarly, this facility has been introduced for RTGS and NEFT systems.
The RBI stated in a statement on December 30, “Currently, the Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) systems enable a remitter to verify the name of the beneficiary before initiating transfer.”
The National Payments Corporation of India (NPCI) will help to develop this facility.
“It has been decided to put in place a similar facility that would enable a remitter to verify the beneficiary bank account name before initiating a transaction using RTGS or NEFT system. Accordingly, National Payments Corporation of India (NPCI) has been advised to develop the facility and onboard all banks,” it added.
This facility will be provided to RTGS and NEFT system users through internet banking and mobile banking. The facility shall also be available to remitters visiting branches for making transactions.
The RBI has also advised the banks, which are direct members or sub-members of RTGS and NEFT, to offer this facility by April 1, 2025.
MPC announcement
During the Monetary Policy Committee meeting on October 9, 2024, the then RBI governor Shaktikanta Das announced the new facility provided under the RTGS and NEFT systems.
“There have been requests to introduce such a facility for Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (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,” the RBI governor said.
According to Das, the new facility will avoid fraud and incorrect transactions.
“Remitters can input the account number and the branch IFSC code of the beneficiary, following which the name of the beneficiary will be displayed. This facility will increase customer confidence as it would reduce the possibility of wrong credits and frauds. Detailed guidelines will be issued separately,” he added.
