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Domestic Money Transfer

Reserve Bank of India (RBI) has reviewed the guidelines on domestic money transfer.

What was the rationale behind the relaxation in guidelines on domestic money transfer?

A large number of people, particularly the migrant population, did not have access to formal banking channels for want of proof of identity / address. Consequently, they faced difficulties in using the authorized channels for transferring funds. Therefore, the guidelines on domestic money transfer were relaxed to facilitate fund transfers of small values using formal banking channels.

What relaxations were given in the domestic money transfers?

 

 Nature of transaction Limit Other guidelines (revised)
Cash Pay-out Customers transfer funds from their bank accounts for delivery in cash to the recipients (not having bank accounts) at an ATM or through Business Correspondent (BC) ₹10,000 per transaction with a cap of ₹25,000 per beneficiary per month The remitting bank shall obtain and keep a record of the name and address of the beneficiary.
Cash Pay-in Walk-in customers (not having bank accounts) remit funds to the bank account of a beneficiary through NEFT ₹50,000 Remitting banks / BCs shall register the remitter based on a verified cell phone number and a self-certified ‘Officially Valid Document (OVD)’.
Every transaction by a remitter shall be validated by an Additional Factor of Authentication (AFA).
Remitting banks and their BCs shall conform to Income Tax provisions pertaining to cash deposits.
Remitter bank shall include remitter details as part of the IMPS / NEFT transaction message.
The transaction message shall include an identifier to identify the fund transfer as a cash-based remittance.
Walk-in customers (not having bank accounts) transfer funds to the bank account of a beneficiary through BCs, ATMs, etc. ₹5,000 per transaction with a cap of ₹25,000 per remitter per month
Card-to-Card transfer Excluded from the purview of the domestic money transfer framework and are governed under the guidelines / approvals granted for such instruments.


References

Reserve Bank of India. (2011, October 05). 'Domestic Money Transfer – Relaxations'. Retrieved from https://rbi.org.in/scripts/FS_Notification.aspx?Id=6750&&fn=9&&Mode=0

Reserve Bank of India. (2024, July 24). 'Domestic Money Transfer – Review of Framework'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12707&Mode=0


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