As a move to speed up electronic fund transfers, banks have decided to keep customers' bank account number as the sole criteria for such transactions. The new process is likely to reduce errors in the process along with speeding it up.
The new mechanism has come into effect from January 1, 2011. The process in completely in line with the directive given by RBI in this regard necessitating the need for the customer to mention his account number twice for any electronic fund transfer process either online or through bank branches.
"In the Indian context, given the many different ways in which beneficiary names can be written, it becomes extremely challenging to perfectly match the name field contained in the electronic transfer instructions with the name on record in the books of the destination bank."
"Any manual intervention not only delays completion of the instruction, but also provides scope for error and fraudulent intent," the RBI said.
All electronic payment processes like RTGS, NEFT, NECS and ECS will apply the new process.
Although customer's name has to be mandatorily mentioned while making electronic fund transfers, the credit purpose will be solved by the account number only.