What changed
RBI observed that despite a 2010 circular mandating positive confirmations for NEFT credits, many beneficiary banks are not sending the N-10 confirmation message to the originating bank. This means originators cannot confirm funds reached the beneficiary. RBI now demands banks report their current status and submit a corrective action plan within 15 days.
What it means for you
Banks must urgently ensure their systems send positive confirmations for every inward NEFT message, and that confirmations are sent to originators as soon as the beneficiary account is credited, or at least by end of day. Non-compliance will be monitored and viewed seriously, potentially leading to regulatory action. This is critical for maintaining customer trust in NEFT.
What you must do
- Immediately audit your NEFT inward message processing to ensure N-10 confirmation messages are being sent for every credit.
- If your positive confirmation rate is below 100%, fix system gaps and ensure confirmations are sent by end of day at the latest.
- Submit a detailed status report and action plan to RBI within 15 days of receiving this circular.
- Set up internal monitoring to track confirmation rates and escalate any deviations to senior management.
Who it affects
All NEFT-participating banks, Beneficiary banks receiving inward NEFT messages, Originating banks that rely on confirmations to serve customers
What is a positive confirmation in NEFT?
It is a message (N-10) sent by the beneficiary bank to the originating bank confirming that funds have been credited to the beneficiary's account. This allows the originator to inform the sending customer that the transfer is complete.
Why is RBI concerned about low confirmation rates?
Positive confirmation is a key feature that built trust in NEFT. When banks fail to send it, customers lose confidence, and the system's efficiency is undermined. RBI found some banks sending confirmations for less than 10% of inward messages.
What is the deadline for banks to act?
Banks must report their current status and send a plan of action to RBI within 15 days of receiving this letter. Immediate system fixes are expected, with confirmations to be sent by end of day at the latest.