RTGS NEFT Transaction Rules Full Updates

NEFT (National Electronic Funds Transfer) is a batch-based system for transferring funds, while RTGS (Real-Time Gross Settlement) processes transactions individually and in real-time, primarily for high-value transfers.  As of April 1, 2025, the Reserve Bank of India (RBI) has mandated significant updates to the Real-Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems to enhance transaction security and reduce errors.​

Key Updates:

Beneficiary Name Verification:

·       Feature Introduction: Remitters can now verify the beneficiary's account name before initiating RTGS or NEFT transactions, similar to the existing functionality in UPI and IMPS systems. This aims to reduce errors and prevent fraud by ensuring funds are transferred to the correct recipient

·       Implementation Deadline: All banks participating in RTGS and NEFT were required to offer this facility by April 1, 2025.

·       Access Channels: The verification service is available through internet banking, mobile banking, and at physical bank branches for in-person transactions. ​

·       Development Responsibility: The National Payments Corporation of India (NPCI) has been tasked with developing the necessary infrastructure and ensuring all banks are onboarded to provide this service. ​

Operational Details:

Ø  Verification Process: When initiating a transaction, the remitter enters the beneficiary's account number and IFSC code. The system then retrieves and displays the beneficiary's account name from the bank's Core Banking Solution (CBS), allowing the remitter to confirm the details before proceeding. ​

Ø  Handling Verification Failures: If the beneficiary's name cannot be retrieved, the remitter has the discretion to proceed with the transaction. Specific alert messages will be displayed to guide the remitter in such cases

Ø  Data Privacy: NPCI will not store any data related to this facility. In case of disputes, the remitting and beneficiary banks will resolve the matter based on unique lookup reference numbers and corresponding logs. ​

Ø  Charges: This beneficiary account name lookup facility is provided to customers free of chargeThese updates reflect the RBI's commitment to bolstering the security and reliability of digital fund transfers in India, ensuring a safer and more efficient banking experience for all users.

To prevent errors and fraud, the RBI has mandated that banks implementing RTGS and NEFT systems must provide a facility to money senders to verify the name of the beneficiary before initiating the transaction, a feature that is operational from April 1, 2025