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| RTGS NEFT Transactions |
National Electronic Funds Transfer (NEFT) processes transactions in batches, while RTGS (Real Time Gross Settlement) processes them individually and in real time, making RTGS suitable for high-value, urgent transactions and NEFT for smaller, less time-sensitive transactions.
As of April 1, 2025, significant
updates have been implemented to enhance the security and efficiency of India's
digital payment systems, particularly concerning the Unified Payments Interface
(UPI), Real-Time Gross Settlement (RTGS), and National Electronic Funds
Transfer (NEFT) services.
https://youtu.be/XPu0Z7IDAPU?si=W46QJET6VfQYZtAM
UPI Transaction Rule Changes:
Removal of Inactive or Reassigned Mobile Numbers: To prevent unauthorized transactions and reduce errors,
banks are now required to identify and remove mobile numbers that have been
deactivated or reassigned to new users. This measure ensures that UPI
transactions are linked only to active and authorized users.
Mandatory System Updates:
Banks and UPI payment service providers must regularly update their systems to
minimize transaction errors. This includes preparing and updating lists of
mobile numbers weekly to prevent unsuccessful or incorrect transactions.
User Consent for Mobile Number Updates: Any updates to a user's mobile number within the UPI system
now require explicit consent from the user through their UPI application.
Without this consent, users will be unable to perform UPI transactions with the
updated number.
Monthly Reporting to NPCI:
Banks and UPI apps are obligated to submit monthly reports to the National
Payments Corporation of India (NPCI), detailing the number of UPI IDs linked to
mobile numbers, active users, and the volume of UPI-based transactions.
RTGS and NEFT Transaction Rule
Updates:
Ø The Reserve Bank of India (RBI) has introduced a beneficiary
name verification feature for RTGS and NEFT systems to enhance transaction
accuracy and security. Key aspects include:
Ø Beneficiary Name Verification: Remitters can now verify the beneficiary's account name
before initiating RTGS or NEFT transactions. This feature aims to reduce errors
and prevent fraud by ensuring funds are transferred to the correct recipient.
Ø Implementation Deadline:
All banks participating in RTGS and NEFT systems were required to offer this
facility by April 1, 2025.
Ø Access Channels:
The verification service is available through internet banking, mobile banking,
and at physical bank branches for in-person transactions.
Ø Development Responsibility: The NPCI has been tasked with developing the necessary
infrastructure and ensuring all banks are onboarded to provide this service.
These updates reflect a concerted effort by Indian financial authorities to
bolster the security and reliability of digital payment systems, thereby
enhancing user confidence and reducing the potential for transaction-related
errors and fraud.
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