What changed
RBI increased the per-transaction cash payout limit from Rs 5,000 to Rs 10,000 for transfers to beneficiaries without bank accounts, with a monthly cap of Rs 25,000. It now allows walk-in customers (e.g., migrant workers) without bank accounts to transfer funds to bank accounts, subject to a transaction limit of Rs 5,000 and monthly cap of Rs 25,000 per remitter. Additionally, fund transfers among domestic debit, credit, and prepaid cards are permitted under the same transaction and monthly limits.
What it means for you
Banks and non-banks can now serve unbanked individuals more effectively, enabling small-value remittances through formal channels. This supports financial inclusion by providing safe, secure, and efficient money transfer options for migrant workers and others lacking formal ID/address proof. Institutions must implement robust safeguards, including velocity checks and customer alerts, and report suspicious transactions. Inter-bank settlements must use RBI-approved payment systems, and customer grievances fall under the Reserve Bank - Integrated Ombudsman Scheme (as amended from time to time).
What you must do
- Update systems to allow cash payouts up to Rs 10,000 per transaction (monthly cap Rs 25,000) to beneficiaries without bank accounts.
- Enable walk-in customers without accounts to transfer up to Rs 5,000 per transaction (monthly cap Rs 25,000) to bank accounts.
- Permit fund transfers among domestic debit/credit/prepaid cards within the same transaction and monthly limits.
- Implement robust safeguards including velocity checks, customer alerts, and immediate investigation of unusual credit spikes.
- Ensure inter-bank settlements use only RBI-approved payment systems and fix reasonable charges to popularize the scheme.
Who it affects
All Scheduled Commercial Banks including RRBs, Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, Authorised Card Payment Networks, Non-bank entities facilitating domestic money transfers
What safeguards must banks implement for these relaxed money transfer facilities?
Banks must put in place robust systems including velocity checks, customer alerts for credits, immediate investigation of unusual credit spikes, and reporting of suspicious transactions to appropriate authorities.