Beneficiary account name look-up facility for RTGS, NEFT transactions soon; how it will reduce wrong money transfers

The Reserve Bank of India (RBI) has proposed a new feature that would allow RTGS and NEFT remitters to verify the recipient's name before executing the payment, similar to the feature available in UPI and IMPS transfers. This initiative aims to reduce instances of incorrect fund transfers.

The announcement was made by the RBI governor, Shaktikanta Das, during the Monetary Policy Committee meeting on October 9, 2024.

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“Introduction of beneficiary account name look-up facility: 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. Accordingly, 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,” stated the Statement on Developmental and Regulatory Policies released on October 9, 2024.

UPI and IMPS have the facility for the remitter of funds to verify the name of the receive before executive the payment. Now it is proposed to apply the same in RTGS and NEFT systems so that remitter can verify the beneficiary name.

"This proposed initiative by RBI to enable remitters to verify the name of the beneficiary before initiating a payment transaction is a critical step in enhancing payment security. Extending this to NEFT and RTGS systems would drastically reduce fraud and misdirected payments, adding trust in the digital financial services. Apart from transparency on the account number and IFSC code, the visibility on the beneficiary's name will help bring confidence among consumers and businesses, further mitigating the risk of errors during fund transfers and ensuring a smooth transaction experience," said Amit Relan, Co-Founder and CEO, mFilterIt.

What is IMPS?

Immediate Payment Service is a new facility added to Mobile Banking Service. It facilitates funds transfer to an account of the beneficiary with a participating bank, based on beneficiary's Mobile Number & MMID or Account No & IFSC.

How to send money through using IMPS (Immediate Payment Service)

Step 1: Log in to your bank's application or mobile banking account
Step 2: Select IMPS or Funds Transfer
Step 3: Choose to send money using the beneficiary's mobile number and MMID, or their account number and IFSC code
Step 5: Enter the beneficiary's details, including their mobile number or account number, the amount you want to send, and your MPIN
Step 6: Review the transaction details and confirm the transfer.

How to send money through RTGS

For effecting an RTGS/NEFT remittance the remitter has to furnish the following information:

• Amount to be remitted.
• Remitting customer’s account number which is to be debited
• Name of the beneficiary.
• Account number of the beneficiary.
• Purpose of remittance
• IFSC code of the destination bank branch

Log in: Log in to your bank's net banking account or mobile app.
Step 1: Under fund transfer, select RTGS
Step 2: Add beneficiary:
Step 3: Enter the amount to be transferred
Step 4: Review the details and confirm the transaction.
Step 5: Authenticate the transaction using an OTP and click Submit.