The Reserve Bank of India (RBI) announced a new feature on Monday aimed at enhancing security and reducing errors in digital transactions. By April 1, 2025, a beneficiary bank account name look-up facility will be introduced for both the Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems.
This new feature will allow users to verify the name of the beneficiary before initiating transactions, helping to prevent errors and fraud. Currently, similar functionalities exist in the Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) systems.
How the New System Works
According to the RBI’s official circular, the name verification feature will ensure that the beneficiary’s name matches the account details provided by the sender. This will add an extra layer of security and accuracy to digital payments.
The National Payments Corporation of India (NPCI) has been tasked with developing and implementing the system. Once ready, it will be rolled out across all banks participating in the RTGS and NEFT networks.
Availability and Accessibility
The new feature will be accessible through multiple channels:
Internet Banking and Mobile Banking: Customers using online platforms will see the verification option integrated into their transaction process.
Bank Branches: For those initiating transactions at physical branches, bank staff will assist in verifying the beneficiary details before processing payments.
Benefits of the Facility
The introduction of this system is expected to bring several advantages:
Error Reduction: Users can confirm the recipient’s account name before making payments, reducing the chances of mistakes caused by incorrect account details.
Fraud Prevention: Real-time name verification will minimize the risk of fraudulent transactions or misdirected funds.
Enhanced Trust: Similar to UPI and IMPS, this feature will provide an added sense of security for users, encouraging wider adoption of digital payment systems.
Context and Court Intervention
The announcement follows a directive from the Delhi High Court earlier on Monday, urging the RBI to implement a name verification system for RTGS and NEFT transactions without delay. Justice Pratibha M. Singh highlighted the importance of such a system in preventing cyber frauds, warning that delays could lead to financial losses for consumers unknowingly transferring money to fraudulent accounts.
The court’s directive came during the hearing of a case involving fraudulent websites misusing trademarks to deceive customers. The court mandated that the system be implemented across all banks to safeguard consumers.
RBI’s Vision for Digital Payments
This initiative aligns with the RBI’s broader goal of strengthening the digital payment ecosystem in India. As more people rely on online banking, such measures are expected to build trust and encourage greater adoption of secure and efficient payment methods.
By April 2025, the beneficiary name look-up facility will become a key feature of RTGS and NEFT transactions, further solidifying India’s position as a leader in digital payment innovation
