The Reserve Bank of India (RBI) has issued an updated framework for Domestic Money Transfer (DMT) services, reflecting significant advancements in banking and digital payment systems since the original guidelines were introduced in 2011.
The RBI circular said, “There has been significant increase in the availability of banking outlets, developments in payment systems for funds transfers, and ease in fulfilling KYC requirements etc., since then; and now users have multiple digital options for funds transfer.”
A review of various services facilitated in the current framework was recently undertaken. In a circular addressed to authorized payment system operators and participants, including both banks and non-banking institutions, the RBI highlighted several key changes:
Cash Pay-out Service: The remitting bank must obtain and keep a record of the name and address of the beneficiary.
Cash Pay-in Service:
- Remitting banks/Business Correspondents (BCs) must register the remitter based on a verified cell phone number and a self-certified ‘Officially Valid Document (OVD)’ as per the Master Direction – Know Your Customer Direction 2016, as amended from time to time.
- Every transaction by a remitter must be validated by an Additional Factor of Authentication (AFA).
- Remitting banks and their BCs must conform to provisions of the Income Tax Act, 1961 and the rules / regulations framed thereunder (as amended from time to time), pertaining to cash deposits.
- Remitter bank must 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.
The guidelines on Card-to-Card transfers have been excluded from the DMT framework and will instead follow the specific guidelines and approvals for such instruments. The updated framework will come into effect from November 1, 2024.