RBI Mandates Banks to Allow Remitters to Confirm Account Names Prior to RTGS and NEFT Transfers
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Mumbai, Dec 30 (NationPress) The Reserve Bank of India (RBI) has issued a directive on Monday to all banking institutions, instructing them to implement a feature that allows remitters to confirm the name associated with the beneficiary's bank account prior to executing a transaction through the RTGS or NEFT systems.
The RBI circular specifies, "All banks that are direct members or sub-members of RTGS and NEFT must provide this functionality by April 1, 2025."
This new feature will enable remitters to enter the account number and the branch’s IFSC code of the beneficiary, after which the beneficiary's name will be displayed.
Implementing this feature is expected to boost customer trust as it will minimize the chances of erroneous credits and fraudulent activities.
The proposal for a beneficiary bank account name verification feature for the Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems was highlighted in the RBI’s Statement on Developmental and Regulatory Policies on October 9, 2024.
Presently, the Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) allow remitters to confirm the beneficiary's name before initiating a transfer.
The RBI has now decided to introduce a similar feature for RTGS and NEFT, instructing the National Payments Corporation of India (NPCI) to develop this capability and onboard all banks, as per the RBI's communication.
Furthermore, the RBI has mandated that banks participating in RTGS and NEFT systems must make this feature accessible to their customers through Internet banking and Mobile banking.
This facility will also be available for remitters who visit bank branches to conduct transactions. Detailed specifications for the implementation have been provided to banks.
The RBI's decision follows numerous requests for the introduction of such a feature for the RTGS and NEFT systems, similar to what is available for payment systems like UPI and IMPS.
In light of this, the RBI has proposed to launch a 'beneficiary account name look-up facility' to enable remitters to verify the account holder's name before initiating any funds transfer.
It was also noted that an official order for the introduction of this facility will be issued separately.
