The Reserve Bank of India has directed the National Payments Corporation of India to create a feature allowing customers to verify the name of the bank account recipient before completing online fund transfers via RTGS and NEFT. This measure aims to reduce errors and prevent fraud.
The RBI on Monday instructed all banks that are direct or sub-members of the RTGS and NEFT systems to implement this facility by April 1, 2025.
Currently, services like the Unified Payments Interface and Immediate Payments Service already provide similar name verification features before initiating a 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," it said.
RBI has advised the National Payments Corporation of India to develop the facility and onboard all banks.
It further said banks that are participants of RTGS and NEFT systems shall make this facility available to their customers through internet banking and mobile banking.
The facility will also be available to remitters visiting branches for making transactions.
Giving details, the RBI circular said that to ensure that remitters using RTGS and NEFT systems can verify the name of the bank account to which money is being transferred before initiating the transfer and thereby avoid mistakes and prevent frauds, a solution for fetching the beneficiary's name is being implemented.
"Based on the account number and IFSC of the beneficiary entered by the remitter, the facility will fetch the beneficiary's account name from the bank's Core Banking Solution (CBS)," it said.
"Beneficiary account name provided by the beneficiary bank shall be displayed to the remitter. In case the beneficiary name cannot be displayed for any reason, the remitter can proceed with the fund transfer, at her discretion," it said.
RBI further said that the NPCI shall not store any data relating to this facility. In case of a dispute, the remitting bank and the beneficiary bank shall resolve the dispute based on the unique lookup reference number and the corresponding logs.
Also, the beneficiary account name lookup facility has to be made available to customers without any charge.
(With PTI inputs.)
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