The Reserve Bank of India (RBI) is set to roll out a significant update for the National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) systems. By April 1, 2025, users will have access to a beneficiary account name lookup feature, designed to reduce errors in fund transfers and boost customer confidence in digital transactions.
Key Features of the Name Lookup Facility
- Prevention of Wrong Transfers:
Users will now be able to verify the beneficiary’s name by inputting the account number and the bank’s IFSC code before initiating a transaction. This mirrors the functionality already available in Unified Payments Interface (UPI) and Immediate Payment Service (IMPS) systems. - Improved Fraud Protection:
The feature aims to minimize fraud and incorrect transactions by ensuring transparency in payment systems. - Wide Accessibility:
The facility will be available via internet banking, mobile banking, and even at bank branches for over-the-counter transactions.
Development and Rollout Timeline
The National Payments Corporation of India (NPCI) has been tasked with developing and implementing the system across all banks participating in NEFT and RTGS networks. Banks must integrate the system and offer the service to customers by the stipulated deadline.
Background and Announcements
This initiative was first proposed during the Monetary Policy Committee meeting in October 2024. RBI Governor Shaktikanta Das emphasized the demand for a secure mechanism to verify beneficiary details in NEFT and RTGS transactions.
Governor Das explained:
“This facility will reduce the likelihood of wrong credits and enhance consumer trust. Detailed guidelines will be issued soon.”
Looking Ahead
With the integration of this feature, digital payment systems like NEFT and RTGS will align with the secure practices of UPI and IMPS, ensuring safer and more transparent transactions. This update reflects the RBI’s commitment to advancing digital payment infrastructure and safeguarding consumer rights.
Consumers are encouraged to use this feature once available and report any issues to their respective banks for resolution.
