RBI Sets 2025 Deadline for Enhanced Fund Transfer Verification

The Reserve Bank of India mandates banks to provide account name verification for RTGS and NEFT transfers by April 2025. Aimed at bolstering security, this move aligns with existing services like UPI and ensures error-free transactions. NPCI will develop infrastructure to support this initiative.

The Reserve Bank of India (RBI) has issued a directive compelling banks that offer Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) services to introduce a beneficiary account name lookup facility by April 1, 2025. This initiative requires banks to integrate the feature into internet and mobile banking platforms, as well as provide it at physical branches for in-person customers.

The central bank aims to elevate the security and dependability of digital fund transfers through this measure. As per the RBI's statement, all banks, whether direct or sub-members of RTGS and NEFT, are expected to comply by the specified deadline.

Currently, services like Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) allow senders to verify the beneficiary's name before proceeding with a transaction. Recognizing the utility of such a feature, the RBI has opted to introduce a comparable mechanism for RTGS and NEFT. This will enable individuals to confirm the beneficiary's account name prior to the funds being transferred.

First proposed on October 9, 2024, the RBI underscored the plan's role in minimizing transactional errors and assuring precise fund transfers. To facilitate this service implementation, the RBI has instructed the National Payments Corporation of India (NPCI) to work on developing and standardizing the necessary infrastructure and ensuring bank compliance.

This initiative not only mandates service availability across all RTGS and NEFT network banks by the 2025 deadline but also promises to enhance user convenience and trust in digital banking systems. By allowing transaction initiators to verify recipient details in advance, the RBI aims to reduce error rates and boost the operational efficiency of India's electronic payment landscape.

(With inputs from agencies.)