The Reserve Bank of India (RBI) has brought together its existing rules for domestic money transfers under a new set of directions, introducing clear transaction limits and security requirements for cash-based transfers through formal banking channels.
Issued on Wednesday as the Reserve Bank of India (Domestic Money Transfer) Directions, 2026, the rules take effect immediately. They apply to scheduled commercial banks, including regional rural banks and co-operative banks, as well as authorised payment system operators and participants, including banks and non-banks, wherever applicable.
The framework is designed to support small-value transfers, particularly for migrant workers and others who may lack conventional banking access because of limited identity or address documents.
Two types of domestic transfers
RBI has defined 2 services:
- Cash pay-out: Money moves from a customer’s bank account to an unbanked recipient, who can collect it through an ATM, Business Correspondent (BC) or another authorised channel. The limit is ₹10,000 per transaction and ₹25,000 per beneficiary per month. Banks must record the beneficiary’s name and address.
- Cash pay-in: Customers deposit cash through an authorised channel for transfer to a bank account. Walk-in customers can remit up to ₹50,000 through NEFT at a bank branch. Transfers through BCs, ATMs and other channels are capped at ₹5,000 per transaction and ₹25,000 per remitter per month.
Sender verification and transaction security
For cash pay-in services, banks and their BCs must register customers using a verified mobile number and a self-certified Officially Valid Document (OVD), as specified under RBI’s Know Your Customer Directions, 2025.
Every transaction must also pass an Additional Factor of Authentication (AFA). Sender details and a specific identifier distinguishing cash-based transfers must be included in IMPS or NEFT messages. Banks and BCs must also follow applicable cash-deposit provisions under the Income-Tax Act, 2025, and related rules.
Monitoring and customer protection
Banks and non-banks must introduce safeguards such as transaction velocity checks and credit alerts. Unusual increases in credits to individual or groups of accounts must be investigated promptly, and suspicious transactions reported to the relevant authorities.
Transfers are expected to be completed in real time or near real time, with inter-bank settlements routed only through RBI-approved payment systems. Providers may set reasonable service charges. Customer complaints will fall under the RBI-Integrated Ombudsman Scheme, 2026.
The new directions repeal the earlier circulars dated October 5, 2011, and July 24, 2024. Card-to-card transfers remain outside the framework and will continue under the rules governing their respective payment instruments.
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