RBI's New Mandate for Secure Fund Transfers

The Reserve Bank of India (RBI) has issued a directive requiring banks to implement a beneficiary account name verification system for Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) services by April 2025. This initiative aims to enhance the security of digital fund transfers across all platforms, including online banking, mobile apps, and physical branches.

In a notification released on Monday evening, the RBI emphasized the importance of this new system in reducing transfer errors. The central bank has also tasked the National Payments Corporation of India (NPCI) with developing the necessary technical infrastructure and ensuring bank participation.

Existing Platforms and Future Enhancements

Currently, payment platforms like UPI and IMPS allow senders to verify beneficiary names before transferring funds. The upcoming system will extend this verification feature to RTGS and NEFT transfers, providing users with an additional layer of security.

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