MUMBAI: The Reserve Bank of India (RBI) on Tuesday consolidated its existing instructions on domestic money transfers into a single set of directions, retaining the transaction limits prescribed under the framework and formalising safeguards for cash-based remittances.
For cash-based remittances into bank accounts, walk-in customers at bank branches (not necessarily having an account with the same bank) can transfer up to ₹50,000 in cash through the National Electronic Funds Transfer (NEFT) system. Banks can also allow such customers to transfer funds through business correspondents (BCs), ATMs and other permitted channels, subject to a limit of ₹5,000 per transaction and a monthly cap of ₹25,000 per remitter.
Under the directions, banks can facilitate cash payouts from customers’ accounts to beneficiaries who do not have bank accounts through ATMs, BCs or other authorised payment channels. Such transfers are capped at ₹10,000 per transaction, subject to a monthly ceiling of ₹25,000 per beneficiary.
These transaction limits were part of the existing framework and have been retained in the latest directions.
The central bank has also retained requirements for remitter registration based on a verified mobile phone number and a self-certified officially valid document (OVD), as prescribed under its Know Your Customer Directions, 2025. Every transaction must be validated through an additional factor of authentication (AFA).
Remitting banks and BCs must include the details of the remitter in the Immediate Payment Service (IMPS) or NEFT transaction message. The transaction message must also carry an identifier to distinguish cash-based remittances.
The directions require banks and non-banks to put in place safeguards, including velocity checks and alerts to customers regarding credits into accounts through these facilities. Any unusual increase in the volume of credits in a particular account or group of accounts must be investigated immediately. Suspicious transactions must be reported to the appropriate authorities.
Fund transfers under the framework are expected to be effected on a real-time or near-real-time basis. Inter-bank settlement must be carried out only through RBI-approved payment systems.
The directions apply to all scheduled commercial banks, including regional rural banks, urban co-operative banks, state co-operative banks and district central co-operative banks, as well as authorised payment system operators and participants, to the extent applicable to their domestic money transfer services.
Card-to-card transfers have been excluded from the scope of the directions and will continue to be governed by the guidelines and approvals applicable to the respective payment instruments.
Banks and non-banks may fix reasonable charges for domestic money transfer services. They may also put in place appropriate systems for grievance redressal. Customer grievances under the directions will fall within the purview of the RBI-Integrated Ombudsman Scheme, 2026.
With the issuance of the new directions, the RBI has subsumed and repealed its October 5, 2011, circular on relaxations in domestic money transfers and the July 24, 2024, circular reviewing the framework.
Source: Business Standard
