You will soon be able to verify beneficiary details during RTGS, NEFT payments for free

The Reserve Bank of India (RBI) announced on Monday the launch of a new beneficiary bank account name verification feature for both the Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems. All banks that are direct members or sub-members of RTGS and NEFT systems are advised to offer this facility no later than April 1, 2025, the Reserve Bank said in a release on Monday.

This facility will allow remitters to verify the beneficiary's details before initiating a transaction for free. This move will allow for reduced risk while transacting, thereby improving accuracy as well as eliminating the chances of fraud.

"It has been decided to put in place a similar facility that would enable a remitter to verify the beneficiary bank account name before initiating a transaction using RTGS or NEFT system," said the official RBI announcement.

The RBI has directed banks to make this facility available to their customers through Internet banking, Mobile banking, as well as physical bank branches.

Currently, users who pay via the Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) can verify the details of their beneficiaries. Certain private banks also charge a nominal fee for users to verify these details. However, once the new system becomes mandatory after April 1, 2025, this facility will be provided to all users for free. 

The RBI has asked the National Payments Corporation of India (NPCI) to develop and implement this verification facility. In its note, the RBI stated, "Beneficiary account name provided by the beneficiary bank shall be displayed to the remitter. In case the beneficiary name cannot be displayed for any reason, the remitter can proceed with the fund transfer, at her discretion." The circular also details that NPCI will not store any user data relating to this facility.