The Reserve Bank of India (RBI) has mandated the implementation of a beneficiary account name verification system for fund transfers via Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) services by April 2025.
Currently, payment systems such as the Unified Payments Interface (UPI) and Immediate Payment Service (IMPS) allow remitters to verify the name of the beneficiary before initiating a transfer. Extending this functionality to RTGS and NEFT, the RBI has directed the National Payments Corporation of India (NPCI) to develop the necessary infrastructure. All participating banks must onboard this facility by the stipulated deadline.
Key Features of the Beneficiary Name Verification System:
- Integration Across Platforms:
- The facility must be available on Internet banking and mobile banking platforms at the time of beneficiary registration and for one-time fund transfers where the beneficiary is not registered.
- Provision for re-verifying registered beneficiaries at any time must also be included.
- Beneficiary Name Display:
- The name provided by the beneficiary’s bank must be displayed to the remitter.
- If the beneficiary name cannot be displayed, the remitter can choose to proceed with the transaction at their discretion.
- Alerts and Logs:
- Specific alert messages, as outlined in NPCI’s technical documentation, must be shown to the remitter.
- Both remitting and beneficiary banks must maintain detailed logs of all queries, responses, and related activities.
- Data Privacy and Dispute Resolution:
- NPCI will not store any data related to this facility. In case of disputes, the remitting and beneficiary banks will resolve them using the unique lookup reference number and corresponding logs.
- Banks must ensure compliance with applicable data privacy laws.
- Cost-Free Access:
- The beneficiary account name lookup facility must be provided to customers free of charge.
- Mandatory Implementation Deadline:
- All banks, whether direct or sub-members of RTGS and NEFT systems, must offer this facility by April 1, 2025.
This directive, issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007, aims to enhance the security and accuracy of fund transfers. The new facility aligns with the RBI’s ongoing efforts to strengthen digital payment systems and improve customer confidence in electronic banking.
