RBI to Launch Beneficiary Name Verification for RTGS and NEFT by April 2025

The Reserve Bank of India (RBI) announced a new feature on Monday aimed at enhancing security and reducing errors in digital transactions. By April 1, 2025, a beneficiary bank account name look-up facility will be introduced for both the Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) systems.

This new feature will allow users to verify the name of the beneficiary before initiating transactions, helping to prevent errors and fraud. Currently, similar functionalities exist in the Unified Payments Interface (UPI) and Immediate Payments Service (IMPS) systems.

How the New System Works

According to the RBI’s official circular, the name verification feature will ensure that the beneficiary’s name matches the account details provided by the sender. This will add an extra layer of security and accuracy to digital payments.

The National Payments Corporation of India (NPCI) has been tasked with developing and implementing the system. Once ready, it will be rolled out across all banks participating in the RTGS and NEFT networks.

Availability and Accessibility

The new feature will be accessible through multiple channels:

• Internet Banking and Mobile Banking: Customers using online platforms will see the verification option integrated into their transaction process.
• Bank Branches: For those initiating transactions at physical branches, bank staff will assist in verifying the beneficiary details before processing payments.

Benefits of the Facility

The introduction of this system is expected to bring several advantages:

1. Error Reduction: Users can confirm the recipient’s account name before making payments, reducing the chances of mistakes caused by incorrect account details.
2. Fraud Prevention: Real-time name verification will minimize the risk of fraudulent transactions or misdirected funds.
3. Enhanced Trust: Similar to UPI and IMPS, this feature will provide an added sense of security for users, encouraging wider adoption of digital payment systems.

Context and Court Intervention

The announcement follows a directive from the Delhi High Court earlier on Monday, urging the RBI to implement a name verification system for RTGS and NEFT transactions without delay. Justice Pratibha M. Singh highlighted the importance of such a system in preventing cyber frauds, warning that delays could lead to financial losses for consumers unknowingly transferring money to fraudulent accounts.

The court’s directive came during the hearing of a case involving fraudulent websites misusing trademarks to deceive customers. The court mandated that the system be implemented across all banks to safeguard consumers.

RBI’s Vision for Digital Payments

This initiative aligns with the RBI’s broader goal of strengthening the digital payment ecosystem in India. As more people rely on online banking, such measures are expected to build trust and encourage greater adoption of secure and efficient payment methods.

By April 2025, the beneficiary name look-up facility will become a key feature of RTGS and NEFT transactions, further solidifying India’s position as a leader in digital payment innovation

CBI Court sentenced 5 Year Jail to Divisional Manager of NIACL for doing Fraud in Insurance Claim

A Special CBI Court (Court No. 07) in Ahmedabad has sentenced five individuals to five years of rigorous imprisonment (RI) for their involvement in a fraudulent insurance claim case. The court also imposed a total fine of ₹23.5 lakh on the accused. Those convicted include Dinesh Parshotamdas Patel, Sanjay R. Chitre, Manan D. Patel, Shishupal Rajput, and Amar Singh Bialbhai.

Background of the Case

The case was registered by the Central Bureau of Investigation (CBI) on January 30, 2003, based on a complaint against the then Senior Divisional Manager of New India Assurance Company Limited (NIACL), Navsari, Gujarat, and others. It was alleged that the public servants conspired with private individuals to sanction insurance claims based on forged documents, resulting in significant financial losses to NIACL.

Investigation Findings

The CBI’s investigation revealed that during 1999-2000, the accused conspired to defraud the insurance company by submitting false claims under a chemical insurance policy. Manan Patel and Dinesh Patel insured chemicals with NIACL and subsequently fabricated documents to support fake claims of loss.

Key accused, S.R. Chitre, a surveyor and loss assessor, assessed the claims based on forged documents and manipulated photographs to depict a staged accident as genuine. Meanwhile, Amar Singh Bialbhai, an assistant sub-inspector (ASI) and in-charge of Mehlol outpost, lodged a false FIR and prepared fake panchnama reports to substantiate the fabricated losses. Another accused, Shishupal Rajput, a recovery agent, handled the financial transactions to make the claims appear legitimate.

The fraudulent activities caused NIACL a loss of ₹4,89,488.

Legal Proceedings

The CBI filed its chargesheet on June 24, 2005, naming several accused, including:

• Shri S.A. Parmar: Senior Divisional Manager, NIACL (charges abated due to his death during the trial).
• Shri S.R. Chitre: Surveyor/Loss Assessor.
• Shri Manan Dineshbhai Patel: Partner at M/s Pre-Chem Industries.
• Shri Dinesh Parshotamdas Patel: Private individual.
• Shri Shishupal Rajput: Agent and investigator.
• Shri Amar Singh Bialbhai: ASI and in-charge of Mehlol outpost.

1 lac Employees declined in Public Sector Banks in last 7 Years

Public sector banks (PSBs) employed 755,102 individuals in FY11, but by FY24, the number had only slightly increased to 756,015. This represents the lowest workforce count in 13 years. In 13 years, the number of Bank branches increased, the business of banks increased, the workload on staff increased but sadly the number of staff did not increase.

Bank loans

The peak workforce of PSBs occurred in FY17 with 857,500 employees, but since then, the number has dropped by over 100,000. In contrast, private sector banks have seen a significant rise in their workforce, doubling to 845,841 employees during the same period.

The primary reason for the decline in PSB workforce numbers is the series of bank mergers in recent years. In 2019, Dena Bank and Vijaya Bank merged with Bank of Baroda. The following year, 10 state-owned banks were consolidated into just four entities. These mergers led to fewer branches and a reduced need for hiring, as many positions became redundant.

Private sector banks and fintech companies have become attractive options for job seekers, offering higher cash payouts compared to PSBs, which tend to focus on long-term benefits like housing. This shift in focus has drawn younger professionals toward private sector opportunities, where they often find more stability and better monetary rewards.

Between FY18 and FY24, the rise of fintech firms, digital payments, and non-banking financial companies (NBFCs) created a surge in job opportunities within new-age financial services. These firms have actively recruited experienced professionals from public sector banks, especially for roles in risk management and technical functions.

Recruitment in public sector banks has slowed significantly, with hiring now mainly focused on replacing employees who leave. This change is due to slower branch expansions and increased pressure to meet performance targets. In FY24, state-owned banks accounted for only 23% of new branch openings, while private sector banks took the lead.

Another notable trend is the decrease in clerical jobs in banks. In the early 1990s, clerical positions made up more than 50% of bank jobs. By FY21, that number had dropped to just 17.8%. This shift has accelerated in recent years, as public sector banks increasingly hire for more specialized roles.

Many experienced professionals are leaving public sector banks for more lucrative positions in private companies, further reducing the talent pool for state-owned institutions. Additionally, frequent employee transfers in PSBs can discourage professionals seeking more stable roles.

The decline in the workforce of public sector banks is a result of several factors, including structural changes, evolving job preferences, and the growth of alternative financial service providers. While public sector banks continue to play an essential role in India’s economy, addressing these challenges is crucial to ensuring their continued relevance in a competitive financial landscape.

There is also one interesting reason for decline in number of staff in Banks. Banks and Government says that Banks have moved towards digitization and a lot of work has been digitized but the harsh reality is that IT infrastructure of Public Sector Banks is very poor. Though the technology has increased but a lot of work is still manual and requires a lot of man power. Branches are suffering from staff shortage but the banks are hiring only a few number of staff. Moreover, now Banks are slowly and slowly shifting towards hiring contractual staff. A lot of Banks have released notification to hire contractual staff such as Apprentice.

It would be very interesting to watch how the public sector banks manage their staff in the nearby future.

Retired Canara Bank Manager from Kanpur Scammed of Rs 20 Lakh by Fake Stock Market Experts

Kanpur, Uttar Pradesh: A retired senior bank manager, Atul Sonkar (61), has been scammed out of Rs 20 lakh by cyber criminals pretending to be stock market experts. Sonkar, who used to work at Canara Bank, was targeted through a WhatsApp group where the scammers promised him big returns from stock market investments.

How the Scam Happened

The scam started on September 23, 2024, when Sonkar was added to a WhatsApp group by two people, Kruti and Ravi Agarwal, who claimed to be stock market experts. A third person, Namit, joined later and provided fake stock advice. They convinced Sonkar to invest in shares and IPOs, telling him he would earn a lot of money.

They created a fake account for Sonkar and got him to transfer Rs 13 lakh between October 9 and November 18, 2024. The scammers then added him to another group, where they promised to double or even quadruple his money. Between October 15 and November 6, they convinced him to send another Rs 7 lakh.

Realizing the Scam

When Sonkar asked for his money back on November 10, the scammers told him he needed to pay an advance tax before they could return his funds. When he refused, they blocked his account and cut off all communication. That’s when Sonkar realized he had been scammed.

Complaint and Investigation

Sonkar quickly went to the Cyber Police Station in Kanpur and filed a complaint. The police registered a case and started investigating. According to Cyber Cell Inspector Sunil Kumar Verma, the police are trying to track the scammers and freeze the accounts where the money was sent. They are working hard to find the criminals behind this scam.

Warning to the Public

This case is a warning to others about the dangers of online scams. Experts say scammers often target people, especially seniors, by pretending to be experts and offering easy financial gains. They may look convincing, but their offers are fake.

The police are urging people to be careful when getting investment offers through social media, like WhatsApp. It’s important to check the legitimacy of such offers and report anything suspicious. The police hope to catch the scammers and prevent others from being tricked in the future.