The Reserve Bank of India (RBI) has mandated that banks providing Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) services implement a beneficiary account name look-up feature for fund transfers by April 1, 2025. This facility must be made available across internet banking, mobile banking, and physical branches, ensuring accessibility for customers performing transactions online or 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”. Moreover, the beneficiary account name lookup facility will be made available to customers for free before initiating a transaction.
In an official notification issued late on Monday, the Reserve Bank of India (RBI) highlighted that payment systems like Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) already enable remitters to verify the beneficiary’s name before completing a transfer.
Acknowledging the advantages of this feature, the RBI has decided to introduce a similar mechanism for RTGS and NEFT. This new facility will allow individuals to confirm the beneficiary’s account name before initiating transactions through these systems.
RBI Initiative
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. (With ANI Inputs)
