Daijiworld Media Network - Mumbai
Mumbai, Nov 13: The Reserve Bank of India (RBI) has introduced a consolidated framework for domestic money transfer services, setting transaction limits and strengthening customer verification and monitoring requirements.
Under the new directions issued on November 11, cash transfers from bank accounts through cash pay-out services have been capped at Rs 10,000 per transaction, while cash deposits through business correspondents (BCs) are limited to Rs 5,000 per transaction. The Reserve Bank of India (Domestic Money Transfer) Directions, 2026, came into effect immediately.
The framework aims to facilitate small-value fund transfers through formal banking channels, particularly for people such as migrant workers who may face difficulties accessing banking services due to inadequate proof of identity or address.
Under the cash pay-out facility, banks can transfer funds from customers' accounts to recipients who do not have bank accounts. Beneficiaries can collect the money through ATMs, business correspondents or other authorised channels. The limit is Rs 10,000 per transaction, subject to a monthly ceiling of Rs 25,000 per beneficiary.
Under cash pay-in services, customers can deposit up to Rs 50,000 at a bank branch for transfer to a beneficiary's account through the National Electronic Funds Transfer (NEFT) system. Transfers facilitated through business correspondents, ATMs and other permitted channels are subject to a limit of Rs 5,000 per transaction and Rs 25,000 per month per remitter.
The RBI has made it mandatory for remitting banks and business correspondents to register customers for cash pay-in services using a verified mobile number and a self-certified Officially Valid Document (OVD), in accordance with its Know Your Customer Directions, 2025. Every transaction must also be validated through an Additional Factor of Authentication (AFA).
Remitting banks must include the remitter's details in Immediate Payment Service (IMPS) or NEFT transaction messages, along with a separate identifier to distinguish cash-based remittances from other fund transfers.
Banks and non-bank payment operators are required to introduce safeguards such as transaction velocity checks and alerts to customers about credits received through these facilities. Any unusual increase in credit transactions in an account or a group of accounts must be investigated immediately, while suspicious transactions must be reported to the appropriate authorities.
The central bank expects transfers under the framework to be completed on a real-time or near-real-time basis. Inter-bank settlements must be carried out only through RBI-approved payment systems.
Banks and non-bank operators may fix reasonable charges for domestic money transfer services and are required to establish mechanisms for addressing customer complaints. Such grievances will come under the Reserve Bank-Integrated Ombudsman Scheme, 2026.
The directions apply to 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. Card-to-card transfers have been excluded.
The new framework consolidates the RBI's October 2011 instructions on domestic money transfers and the review issued in July 2024.