Gone are the days when payments had to be made by using the same city cheque or a demand draft. With a variety of transfer options like NEFT, IMPS etc, instant money transfer has been made possible. All it requires is a bank account holder's name, account number, and the bank IFSC code.
With the introduction of Core Banking System, all account numbers have a 10-16-digit number which enables the account for remote transactions. With this number, money can be transferred across various locations, banks etc. As convenient as it may sound, errors can prove expensive.
With a number as long as 10-16 digits, it is easier to make errors while feeding in numbers. Have you wondered what options does a customer have in case he/she transfers money to a wrong bank account? There are various scenarios possible.
1. The erroneous number does not exist: This is the best scenario that you can land up in if you have made a wrong bank transfer. In this case, the money just gets returned to your account.
2. You realize immediately that it was a wrong transfer: If upon transfer, you realize that there was an error in the bank account mentioned, it is good to contact the branch manager with the details of the transaction. If your bank is yet to initiate a transfer, then they might be able to hold it back.
3. The transfer has already been affected: This is the most difficult scenario that anyone could land up in. Even in this case, you should get in touch with your bank at the earliest with the details. According to RBI, for a bank transfer to go through, only the bank account number and IFSC needs to match. There may be a mismatch in name, yet the transaction will go through. Also, your bank is under no obligation to verify the correctness of the account numbers or names before effecting the payment.
Intrabank transfer: In cases like these, if it is an intrabank transfer, it might be a little easier for you. Your bank may be able to communicate quickly to the other branch and can initiate a dialogue with the person to whom it is transferred. Yet it is important to understand that once the amount reaches a beneficiary account, it cannot be reversed without the consent of the concerned person. Your bank has no say in the matter.
Interbank transfer: If the same is a case of transfer between different banks, your bank can give you the branch address and the contacts of the branch. It will be up to you to contact the branch and the unintended beneficiary and get the money back. Now the onus rests on you to prove that it was an unintended transfer. There is no higher authority here whom you can approach to get the matter rectified. If the beneficiary agrees, then the reversal can be done, and the funds will be back in your account in a week to 10 days.
Additional Reading: How safe is it to reveal your bank account number?
Remedies when the unintended beneficiary refuses to pay back: In spite of all the proof and explanations, the unintended beneficiary can refuse to reverse the transaction. There are no options other than going legally, which again would be a cumbersome and a time drawing process.
So if you look at the options available to an individual who has done a wrong transfer, there are none which guarantees you the reversal. Hence it is good to be cautious, be doubly sure of the details before you initiate a transfer. When transferring to a new payee, it is always good to make a small transfer and confirm receipt before you go in for higher amount transfers.