NEFT, RTGS rule change:
Verify beneficiary names easily with new account name lookup facility; when can you use it?
Dec 31, 2024
Synopsis
NEFT, RTGS rule change: There have been many instances where remitters remitted funds to the wrong beneficiary. This new rule will help to limit the number of incorrect money transfers.
The Reserve Bank of India (RBI) has proposed the introduction of a beneficiary account name look-up facility for the Real Time Gross Settlement (RTGS) System and National Electronic Funds Transfer (NEFT) System. There have been many instances where remitters remitted funds to the wrong beneficiary. This new rule will help to limit the number of incorrect money transfers.
UPI and IMPS have the facility for the remitter of funds to verify the name of the receive before executive the payment. Now it is proposed to apply the same in RTGS and NEFT systems so that the remitter can verify the beneficiary name.
In a press release dated December 30, the Reserve Bank of India (RBI) said, "Currently, the Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) systems enable a remitter to verify the name of the beneficiary before initiating the transfer. 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 the RTGS or NEFT system. Accordingly, the National Payments Corporation of India (NPCI) has been advised to develop the facility and onboard all banks."
The announcement was made by the RBI governor Shaktikanta Das, during the Monetary Policy Committee meeting on October 9, 2024.
According to the Statement on Developmental and Regulatory Policies released on October 9, 2024, “Introduction of beneficiary account name look-up facility: Payment Systems like UPI and IMPS provide a facility to the remitter to verify the name of the receiver (beneficiary) before initiating a payment transaction. 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’. ‘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."
Beneficiary bank account name look-up facility for RTGS and NEFT: All you need to know about the changes
Where is this beneficiary bank account name look-up facility for RTGS and NEFT available?
This service will be made available to remitters via Internet and mobile banking. The capability will also be available to remitters who visit branches to complete transactions.
Is there a charge for beneficiary account name lookup facility?
Beneficiary account name lookup facility will be made available to customers without any additional charge.
When will the beneficiary account name lookup facility for RTGS, and NEFT be available?
The RBI has recommended that all banks that are either direct or sub-members of RTGS and NEFT provide this service by April 1, 2025.
Beneficiary account name lookup facility for RTGC, NEFT: How it works
In order to prevent mistakes and fraud, a solution for obtaining the beneficiary's name is being deployed to ensure that remitters using RTGS and NEFT systems can verify the name of the bank account to which money is being transferred before completing the transfer. The function will retrieve the beneficiary's account name from the bank's Core Banking Solution (CBS) using the account number and IFSC entered by the remitter.
[The Economic Times]
