Gone are the days when every aspect of loan applications would be manually vetted, with processes stretching from a few days to weeks. Now, applicants can easily authenticate themselves without any physical correspondence or exchange of papers with banks. Among the many features that have enable this is Penny Drop verification that allows instant bank account verification checks. The feature is especially helpful during loan disbursement, with frauds occurring in the form of manipulation of account statements.

With Penny Drop, the idea is to conduct a test transaction to verify one’s bank account. This is achieved by depositing a small amount, typically INR 1, to a person’s bank account, If the deposit succeeds, it means that the bank account is valid.

While Penny Drop APIs have made bank account verification a breeze, there are some problems associated with them. The most important one being that recipients are often confused/concerned with the sudden deposit of money into their account from an unknown source.

NPCI has recognized this issue and has come up with a concept that requires no money transfer with Penniless verification. As the name suggests, the Penniless Verification API retrieves the name of a bank account holder (or status of the account) for an account number without the need for a nominal transaction.

With the Perfios Penniless account verification API, financial institutions can verify the name of the account holder and/or the status of the bank account. Depending on whether the name matches with that returned by the bank’s system, the authenticity status can be determined. Further, as the service requires consent from the borrower, the applicant is better informed about such verifications.

Apart from verifying the name of the account holder, the service can also provide status updates such as blocked account, closed account, foreign account, and so on.

Currently, around 31 financial institutions are using the Penniless platform. And, the number of financial institutions opting for this service is only increasing considering the manifold advantages for both customers and FIs.

Banks and FIs may deal with thousands of customers per day, and there is a huge amount of time and cost involved in manually verifying bank accounts for all customers. Penniless verification can save organizations massive operational overheads while servicing and onboarding customers at scale.

Moreover, penniless verification can take customer convenience up a notch, by doing away with not just paper work and physical visits but also the hassle of a monetary transaction, which can understandably be perplexing to unaware customers.

Perfios is swiftly working towards automating verification, onboarding, and transactions for financial institutions and banks. Join us in powering your growth. Connect with us to know more about Penniless verification.