The Reserve Bank of India (RBI) has announced a name lookup facility for Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems, aiming to reduce fraud and errors. This feature, similar to what Unified Payments Interface (UPI) and Immediate Payment Service (IMPS) offer, will allow remitters to verify the beneficiary’s name before initiating transactions. The National Payments Corporation of India (NPCI) will develop the system, and banks must implement it by April 1, 2025. The facility will be free for users and accessible via internet banking, mobile banking, and bank branches.
Key Highlights
Current vs. Proposed System
Currently, NEFT and RTGS do not let remitters view the beneficiary’s name before transferring funds, unlike UPI and IMPS. With this update, users can ensure accuracy and reduce the risk of sending money to incorrect accounts.
Operational Framework
The facility will use account numbers and IFSC codes to fetch and display the beneficiary’s name from the receiving bank’s core banking system. Both remitting and beneficiary banks must store query-related data, while NPCI will not store any information.
Implementation Timeline
Banks must adopt the system by April 2025, with NPCI responsible for onboarding and developing the infrastructure. Customers will access the feature across digital and physical banking platforms.
Benefits of the Name Lookup Facility
1. Enhanced Accuracy
Verification ensures funds are transferred to the correct account, reducing the risk of errors and disputes.
2. Improved Security
The feature minimizes fraudulent transfers by allowing users to confirm beneficiary details in real-time.
3. Familiarity and Convenience
By mirroring features available on UPI and IMPS, the process becomes user-friendly for customers already accustomed to similar platforms.
4. Reduced Disputes
Banks will face fewer transaction disputes, reducing operational costs and improving customer trust.
5. Faster Error Resolution
Verification allows quick identification of discrepancies, ensuring swift correction of issues.
Summary of the news
| Key Point | Details |
|---|---|
| Why in News | RBI proposed a name lookup facility for NEFT and RTGS to verify beneficiary names, mandating implementation by April 1, 2025. NPCI will develop and onboard banks, with the feature accessible via internet, mobile banking, and branches. |
| Deadline for Implementation | April 1, 2025 |
| Development Agency | National Payments Corporation of India (NPCI) |
| Access Modes | Internet banking, mobile banking, and in-person transactions at bank branches |
| Feature Cost | Free for customers |
| Core Functionality | Verifies beneficiary name using account number and IFSC via the receiving bank’s CBS |
| Current Similar Systems | UPI and IMPS, which already offer beneficiary name verification before transactions |
| Data Storage Rules | Banks to store lookup queries; NPCI prohibited from storing query-related data |
| Objective | Enhance transaction accuracy, reduce fraud, and ensure secure fund transfers |
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