Starting April 1, 2025, the Reserve Bank of India (RBI) will implement a new system to ensure greater security in online money transfers. The new rule mandates verifying the beneficiary’s account name before initiating RTGS and NEFT transfers. This move aims to reduce errors and protect against fraud.
What Does the New Name Verification System Mean for You?
Currently, UPI and IMPS allow users to verify the beneficiary’s name before transferring money. Now, RTGS and NEFT will join the ranks, giving users the added benefit of name verification before completing transactions.
Did You Know in India, UPI transactions have surpassed 10 billion per month. With this new rule, the security of transactions will improve significantly.
Here’s how the new system will work:
- Enter the beneficiary’s account number and IFSC code.
- The system will fetch the beneficiary’s account name directly from the bank’s Core Banking Solution (CBS).
- The name is then displayed to confirm accuracy before completing the transfer.
If the name can’t be retrieved, users will still have the option to proceed with the transaction, but with caution.
Why Is This New Rule Important for Banks and Users?
To meet RBI’s mandate, banks must ensure that the beneficiary name verification system is available across all platforms:
- Internet and mobile banking.
- Bank branches for in-person transactions.
- The system will be completely free for customers.
The RBI’s deadline for compliance is April 1, 2025.
Key Advantages of the New Verification System
The new system promises several key benefits:
- It minimizes errors due to incorrect account information.
- It provides an additional layer of protection against fraudulent transactions.
- It boosts user confidence in online money transfers.
Table: Features Comparison – Old vs. New Systems
| Feature | Existing System | New System (2025) |
|---|---|---|
| Name Verification | UPI, IMPS Only | RTGS, NEFT, UPI, IMPS |
| Verification Cost | Free | Free |
| Access Channels | Mobile, Internet | Mobile, Internet, Branches |
| Fraud Prevention | Limited | Enhanced |
Tackling Fraud Head-On
The RBI’s goal with this system is to prevent fraudulent activities that can occur in RTGS and NEFT transfers. By allowing users to verify the account holder’s name before making payments, this system will help reduce mistakes and protect consumers from fraudsters.
Free for All Users
RBI has ensured that banks will not charge any fees for the name verification service. In case of disputes, banks will use transaction logs to resolve the issue.
How This Will Revolutionize Digital Payments
This change represents a major step forward in enhancing the security of digital payments in India. By incorporating this feature into RTGS and NEFT, the RBI ensures that online transactions become safer, more reliable, and more user-friendly.
As of April 1, 2025, double-check the beneficiary’s name to ensure your transfers are smooth and secure.
Disclaimer
This article is for informational purposes only and does not constitute financial or tax advice. Tax laws are subject to amendments, and individual circumstances may vary. Readers are advised to consult a qualified tax professional or refer to the official Income Tax Department resources for personalized guidance. The author and publisher are not responsible for any decisions made based on this information.
