RBI: The Reserve Bank of India (RBI) has made a significant move to ensure that online fund transfers are safe and secure. The RBI announced that by April 1, 2025, all banks utilizing the National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) systems will offer the option to verify the account name of the beneficiary for the customer.
Why RBI wants to take this initiative
The initiative seeks to avert mistakes in fund transfers and reduce fraud. The option to confirm the beneficiary’s name is already provided in payment platforms such as Unified Payments Interface (UPI) and Immediate Payments Service (IMPS). This service will now be implemented for NEFT and RTGS. This procedure is carried out via the bank’s Core Banking Solution (CBS). This lowers the chance of money being sent to incorrect accounts. It also stops instances of fraud.
RBI has clarified
As per RBI, using the account number and IFSC code provided by the payer, the beneficiary’s bank retrieves the account name from CBS. This name can be seen by the individual sending the money. In order for him to confirm that the information he provided is accurate. If the account name isn’t visible for technical reasons, he can make a decision based on that.
Will it be for free?
This service will be offered to customers at no cost. Additionally, this service will be accessible via internet banking, mobile banking, and branch locations. Considering customer privacy, the National Payments Corporation of India (NPCI) will not retain any data regarding this service. The RBI stated that in the event of disagreements, the remitting bank and the beneficiary bank will address the issue using a unique lookup reference number along with pertinent logs.
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