The Reserve Bank of India (RBI) is set to revolutionize NEFT and RTGS money transfers with a new beneficiary name verification system. Starting April 1, 2025, users transferring funds through RTGS and NEFT can confirm the recipient’s account name before completing transactions. This enhancement will minimize errors and protect against fraud.
What’s Changing in NEFT and RTGS Online Transfers?
Currently, the name verification feature is only available for UPI and IMPS transactions. With the RBI’s new directive, RTGS and NEFT will adopt the same system, ensuring a more secure and user-friendly experience.
Did You Know RTGS processes transactions worth over ₹10 lakh crore daily in India. This new system will drastically improve the safety of these high-value transfers.
Here’s how the process works:
- Enter the beneficiary’s account number and IFSC code.
- The system retrieves the account holder’s name from the bank’s Core Banking Solution (CBS).
- The name is displayed to the sender for confirmation before the transfer is completed.
If the name cannot be retrieved, the sender can still proceed, but the onus is on them to verify details independently.
RBI’s Requirements for Banks
To make this system operational, the RBI has instructed all participating banks to:
- Integrate the name verification system into mobile and internet banking platforms.
- Offer the feature in bank branches for customers completing in-person transactions.
- Ensure the service is free for all users.
Banks must fully comply with these guidelines by April 1, 2025.
Benefits of the New Verification System for NEFT and RTGS
The new system offers significant advantages for users:
- Error Reduction: Eliminates the chances of incorrect transfers due to wrong account details.
- Fraud Prevention: Adds a robust layer of security against fraudulent activities.
- User Confidence: Enhances trust in online banking systems by ensuring accuracy.
Table: Comparison of Old and New Systems
| Feature | Existing System | New System (2025) |
|---|---|---|
| Name Verification | UPI, IMPS Only | RTGS, NEFT, UPI, IMPS |
| Accessibility | Mobile, Internet | Mobile, Internet, Branches |
| Security Against Fraud | Basic | Advanced |
| User Cost | Free | Free |
No Charges for Name Verification
The RBI has mandated that customers will not be charged for this service. Banks will resolve disputes using transaction logs and lookup reference numbers, ensuring transparency.
How This System Prevents Fraud
The initiative directly tackles rising incidents of fraudulent online transactions. Verifying the beneficiary’s name before a transfer ensures the money reaches the intended recipient, reducing the risk of misdirection or fraud.
Why This Rule Is a Game-Changer
By bringing name verification to RTGS and NEFT, the RBI aligns these systems with the highly secure UPI and IMPS platforms. This update is expected to make digital transactions in India safer, more accurate, and widely trusted.
Mark your calendar! From April 2025, verify beneficiary details before every RTGS or NEFT transfer for a secure banking experience.
Disclaimer
This article is for informational purposes only and does not constitute financial or tax advice. Tax laws are subject to amendments, and individual circumstances may vary. Readers are advised to consult a qualified tax professional or refer to the official Income Tax Department resources for personalized guidance. The author and publisher are not responsible for any decisions made based on this information.
