Mumbai (Maharashtra) [India], December 31 : The Reserve Bank of India (RBI) has directed banks giving Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) services to introduce beneficiary account name look-up facility to customers for fund Transfers by April 1, 2025.
Banks participating in the RTGS and NEFT systems must offer this facility through internet banking, mobile banking, and even at physical branches for customers conducting transactions in person.
This move aims to enhance the security and reliability of digital fund transfers.
RBI said "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".
In an official notification late on Monday the central bank stated that currently, payment systems like Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) allow remitters to verify the name of the beneficiary before initiating a transfer. Recognizing the benefits of this feature, the RBI decided to implement a similar mechanism for RTGS and NEFT.
This facility will allow individuals initiating transactions through RTGS or NEFT to confirm the beneficiary's account name before transferring funds.
The RBI had first proposed this initiative on October 9, 2024, emphasizing its importance in reducing errors and ensuring accurate fund transfers.
To enable this system, the RBI has instructed the National Payments Corporation of India (NPCI) to develop the necessary infrastructure and ensure that all banks are onboarded.
RBI said "National Payments Corporation of India (NPCI) has been advised to develop the facility and onboard all banks".
The RBI has mandated that all banks, whether direct or sub-members of the RTGS and NEFT systems, must make this service available to their customers by the April 2025 deadline.
This initiative is expected to significantly enhance customer convenience and trust in digital banking. By enabling users to verify the recipient's account name beforehand, the RBI aims to minimize transaction errors and improve the overall efficiency of electronic payment systems in India.
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