We all use online banking for transfer of funds and usually the method that most of use is NEFT. However convenient it is, what would you do if the money is transferred to a wrong account or you have received the money from a Wrong Account?
NEFT or National Electronic Fund Transfer is used for transferring funds online from one account to another, anywhere in India. It is convenient mode of fund transfer and most of the recipients receive the money in a day or two. There is however a nominal transfer fee in case of transaction from one bank to another while same bank transactions are often free of cost.
Anyway, it is a good tool, granted, but there are problems with it too. What if the money is transferred to a wrong account? Or what if one day you find some amount transferred to your account by mistake? Let us see below why is it complicated in these cases.
How NEFT Works?
NEFT works on the principal wherein the payee or the remitter is the one who chooses the beneficiary or the receiver of the payment. In other words the onus of entering the right payee details is onto the sender or the remitter, so in case you are transferring the amount to someone, you are solely responsible for making sure the payee/beneficiary details are accurate and error free. To this end banks require these following compulsory details from the remitter while adding a payee for NEFT transaction:
- Beneficiary Name: (account holder’s name)
- Beneficiary Address: (in short)
- Beneficiary Bank:
- Beneficiary IFCS code:
- Beneficiary Account Number:
- Beneficiary Account Type:
Most banks will need you to add the Beneficiary Account Number twice to make sure that there are no errors in it. Also the entire details will be display on a page for you to cross check again, before you submit the information and confirm the same via an OTP and your internet banking transaction password. These steps are taken to make sure that the entire set of information is error free. The authentication is done with your knowledge and once confirmed you will receive an SMS on your registered mobile number that you have Added X with the Account number xxxxxxxxxxxx as a beneficiary for NEFT transactions to your bank account xxxxxxxxx.
All of the above tries to make sure that the NEFT transaction is error free and smooth and also the person adding the beneficiary is fully aware of the fact that a payee is added to their net banking accounts. In case there is any problem you can go ahead and delete the payee or if you have not added the payee, then you should contact the customer care of the bank immediately to intimate them of unauthorised usage of your online banking account.
In case of the Amount transferred via NEFT credited to a Wrong Account?
As mentioned above, NEFT transaction information is verified and then the payee is added, giving the remitter enough opportunities to cross check the payment details. In such a case the onus is onto you, the person making the transaction to make sure it is error free from Wrong Account Numbers or IFSC code etc.
Even after thoroughly checking (and overlooking mistakes) if you happen to transfer the funds to a wrong payee/beneficiary that you did not intend to but happened due to you entering a wrong account number, then the option you have is to contact your bank and inform them about the transaction.
Your bank will first check for any technical error on their side during the online transaction that resulted in such an error. Once that is ruled out they will contact the beneficiary bank about the transaction and they will in turn contact the beneficiary who wrongly received the funds.
Now once the payee is notified about the wrong transaction, it is up to him/her to authorize the bank to reverse the entry and transfer the money back to you. If they choose to keep the money and state that the money is transferred to them and belongs to them refusing to return it; you can be looking at a long process of proving that the account number you added was wrongly entered by mistake.
The usual case where such a thing happens is if the Account Holder’s Name is the same but there is a slight mistake in Account Number. For instance Mr. Amit Bachhan with Account number 4209211 could wrongly receive the payment for another Mr. Amit Bachhan with account number 4209212 where in you may have entered one wrong digit in the account number.
If the name of the Payee is different from the payee you intended to pay, the situation is pretty simple, and you will most likely get back your money.
You can get your money back since most people do not retain wrongly transferred money, but the entire thing may take some time. The problem arises only when the receiver does not want to give the money; in that case yours and beneficiary bank will have to intervene and sort the matter and it may be a very long process. Hence you should be very-very careful while entering payee details for NEFT transactions.
What if you Receive money by Mistake?
If you notice that you have received some funds that you are not aware of via online transfer, notify your bank immediately. Yes, it’s always good to receive money, but why would you want to keep someone else’s money? Also if morality is not a problem for you, then explaining the unaccounted money can be an issue. So it is better to notify the bank about it.
Once notified the bank will check the beneficiary name and account number and verify if it is a technical mistake that led to such a transaction or the remitter indeed added your account number and detail as a payee albeit by mistake.
There could be a possibility that due to a single digit change in the account number, you have become the beneficiary by mistake. In this case the bank notifies the payer’s bank and they may contact he concerned person. If however there is no action taken by that person the money shall remain in your account.
If you do not wish to use that money, you can notify your bank about the same. They will block that amount for you, so that you cannot use that money. If in the future the person who wrongly transferred the money contacts the bank, this money can be transferred back after your consent.
Online transaction is based purely on the details you enter and hence there is very little role the bank can play in case of wrong transactions. They can at best inform each other about such transactions and then the onus is on the individuals involved whether or not they acknowledge the wrong transaction and return the money or just simply ‘overlook’ such a transaction. Hence is always advisable to be extra-extra careful while adding Payee details for NEFT transactions.