In order to reduce the possibility of wrong credits and frauds, the Reserve Bank of India (RBI) on Wednesday decided to introduce a beneficiary name verification facility for real-time gross settlement system (RTGS) and the national electronic funds transfer (NEFT) system. This will help the remitter of funds to verify the name of the receiver (beneficiary) before executing a payment transaction.
Currently, both UPI and immediate payment service (IMPS) provide this facility.
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“To enable remitters in RTGS and NEFT to verify the name of the beneficiary account holder before initiating funds transfer, it is now proposed to introduce a ‘beneficiary account name look-up facility’. Remitters can input the account number and the branch IFSC code of the beneficiary, following which the name of the beneficiary will be displayed. This facility will increase customer confidence as it would reduce the possibility of wrong credits and frauds. Detailed guidelines will be issued separately,” said RBI Governor Shaktikanta said in the Statement on Developmental and Regulatory Policies on October 9.
He added that payment systems like UPI and IMPS provide a facility to the remitter to verify the name of the receiver (beneficiary) before initiating a payment transaction. There have been requests to introduce such a facility for Real Time Gross Settlement System (RTGS) and National Electronic Funds Transfer (NEFT) systems.
“This facility will enable the remitter to verify the name of the account holder before effecting funds transfer to him/her through RTGS or NEFT. This will also reduce the possibility of wrong credits and frauds,” he said during the bi-monthly monetary policy statement October 2024.
