New Delhi, December 31 (UITV)- The Reserve Bank of India (RBI) on Monday directed all banks to provide the facility to the remitters to verify the name of the beneficiary’s bank account before initiating a transaction using RTGS (Real Time Gross Settlement) and NEFT (National Electronic Fund Transfer) systems. This decision will make transactions through RTGS and NEFT even more secure, as it will reduce the chances of wrong credit and fraud.
RBI has given banks a deadline of April 1, 2025 to implement this new facility. According to the central bank, “All banks which are direct members or sub-members of RTGS and NEFT are advised to provide this facility before April 1, 2025.” The main objective of this decision is to increase the level of security in the transaction system of banks, so that customers can have confidence and they can make digital payments without any fear.
With the introduction of this new facility, now when customers try to send money to someone through RTGS or NEFT, they will see the name of the beneficiary after entering the beneficiary’s account number and branch IFSC code. With this facility, customers will be able to ensure that their money is going to the right person’s account, which will reduce the chances of errors and fraud.
RBI had earlier proposed the introduction of this facility in its developmental and regulatory policies on October 9, 2024. This move will bring more transparency and security in transactions done through RTGS and NEFT. Also, this step will make digital payment systems more reliable for customers.
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RTGS is a real-time payment system, in which money transactions are done instantly i.e. in real time. This facility is available 24 hours a day and seven days a week, but the minimum limit of transaction in it is Rs 2 lakh. At the same time, NEFT is also an electronic payment system, but it takes time for transactions and it may take from a few minutes to a few hours for the money to reach the beneficiary. There is no minimum transaction limit in NEFT, making it suitable for small transactions as well.
Earlier, the facility to verify the name of the beneficiary was already available in other payment systems like Unified Payments Interface (UPI) and Immediate Payments Services (IMPS). While making payment through these systems, the sender could check the name of the beneficiary, which increased the security of the transaction. Similar facility will now be available in RTGS and NEFT as well, which will increase the level of security in both these systems as well.
RBI has taken this step because customers were demanding facilities like UPI and IMPS in these systems as well. Customers wanted that the name of the beneficiary could be verified in the transactions done through RTGS and NEFT as well, so that their money does not go to the wrong person’s account. With this step, both these systems will now be made more user friendly and secure.
The implementation of this new facility will increase confidence in the digital payment system and people will use these systems without any hesitation. This move of RBI will prove to be an important step towards making the Indian financial system more robust. Now banks have to ensure that they implement this facility in their systems by April 1, 2025, so that customers can get more security and convenience.
