MTSS Direct-to-Account Remittances Allowed via NEFT/IMPS
Current · Source: Reserve Bank of India · RBI/2013-14/511 · issued 04 Mar 2014 · ~2 min read
Quick answerRBI now permits foreign inward remittances under MTSS to be credited directly to beneficiaries' KYC-compliant bank accounts via electronic modes like NEFT or IMPS, even if the beneficiary's bank is different from the Indian Agent bank.
The rule, in the simplest words
Banks that receive foreign money (Partner Banks) can now send it directly to the receiver's bank account using electronic methods like NEFT or IMPS, even if the receiver's bank is different.
The receiver's bank (Recipient Bank) must only put the money into accounts that have completed KYC (know-your-customer checks).
The Partner Bank must mark the transfer as a 'foreign inward remittance' and include the sender's and receiver's details in the electronic message.
The Partner Bank must add an alert in the message saying this is foreign money and cannot go into accounts that are not KYC-compliant or into NRE/NRO (special non-resident) accounts.
The Recipient Bank must keep the receiver's documents as per anti-money-laundering rules and report any suspicious transactions to FIU-IND (India's financial intelligence unit).
How it plays out — a real example
A KYC & compliance officer in Indore receives a foreign inward remittance under MTSS for a customer. Instead of issuing a physical cheque, the officer's Partner Bank uses NEFT to credit the money directly to the customer's KYC-compliant account at a different bank, marking the transfer as a foreign inward remittance with the sender's details. The officer ensures the alert is added so the Recipient Bank knows not to credit it to a non-compliant account.
What changed
The circular now permits foreign inward remittances received under MTSS to be electronically transferred by the Partner Bank to a beneficiary’s KYC‑compliant account held with a Recipient Bank, subject to marking the transfer as a foreign inward remittance and providing required originator and beneficiary details.
What it means for you
The facility allows direct electronic credit of MTSS remittances to beneficiary accounts at Recipient Banks, with the Partner Bank marking the transfer as a foreign inward remittance and ensuring KYC/AML/CFT compliance; Recipient Banks must verify KYC compliance and may report suspicious transactions to FIU‑IND.
What you must do
Ensure your bank's MTSS systems can tag electronic transfers as foreign inward remittances with appropriate alerts.
Verify that beneficiary accounts at Recipient Banks are KYC compliant before crediting direct-to-account remittances.
Include accurate originator and beneficiary information in all electronic remittance messages throughout the payment chain.
Train staff on the new procedure and update internal MTSS guidelines to reflect the direct-to-account facility.
Who it affects
Indian Agents under MTSS (Partner Banks), Recipient Banks holding beneficiary accounts, Overseas principals sending remittances under MTSS, Beneficiaries receiving foreign inward remittances
❓ Common questions
Can we credit remittances to NRE/NRO accounts under this facility?
No, the Partner Bank must add an alert in the electronic message that the remittance should not be credited to NRE/NRO accounts or KYC non-compliant accounts.
What if the beneficiary's account is not KYC compliant?
The Recipient Bank must carry out KYC/CDD of the recipient before crediting the remittance or allowing withdrawal from that account.
Do we need to report suspicious transactions under this facility?
Yes, the Recipient Bank must report suspicious transactions to FIU-IND, including details of the Partner Bank through which the remittance was received.
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/511
A.P. (DIR Series) Circular No. 110
March 4, 2014
To,
All Authorised Persons, who are Indian Agents under Money Transfer Service Scheme
Madam / Sir,
Money Transfer Service Scheme – ‘Direct to Account’ facility
Attention of Authorised Persons, who are Indian Agents under Money Transfer Service Scheme (MTSS) is invited to Para 4.4 (e) Payment to Beneficiaries of Annex II - Section I of the A.P. (DIR Series) Circular No. 89 dated March 12, 2013 on Money Transfer Service Scheme – Revised Guidelines, as amended from time to time.
2. To facilitate receipt of foreign inward remittances directly into bank account of the beneficiary, it has been decided to allow foreign inward remittances received under MTSS to be transferred to the KYC compliant beneficiary bank account through electronic mode, such as NEFT, IMPS etc. The procedure to be followed for the purpose is as under.
Foreign inward remittances received by the bank acting as Indian Agent under MTSS (termed as ‘Partner Bank’), may be electronically credited directly to the account of the beneficiary, held with a bank other than the Indian Agent Bank (termed as ‘Recipient Bank’), subject to the following conditions:
The Recipient Bank will credit the amount transferred by the Partner bank only to KYC compliant bank accounts.
In respect of the bank accounts which are not KYC compliant, the Recipient Bank shall carry out KYC/CDD of the recipient before the remittance to such account is credited or allowed to be withdrawn.
The Partner Bank shall appropriately mark the direct-to-account remittances to indicate to the Recipient Bank that it is a foreign inward remittance.
The Partner Bank shall ensure that accurate originator information and necessary beneficiary information is included in the electronic message while transferring the fund to the Recipient Bank. This information should be available in the remittance message throughout the payment chain i.e. the overseas principal, the Partner Bank and the Recipient Bank. The Partner Bank should add an appropriate alert in the electronic message indicating that this is a foreign inward remittance and should not be credited to KYC non-compliant account and NRE/NRO account.
The identification and other documents of the recipient shall be maintained by the Recipient Bank as per the provisions of Prevention of Money Laundering (Maintenance of Records) Rules, 2005. All other requirements under KYC/AML/CFT guidelines issued by the Reserve Bank of India for MTSS from time to time shall be adhered to by the Partner Bank.
The Recipient Bank may seek additional information from the Partner Bank and shall report suspicious transactions to the FIU-IND with details of the Partner Bank through which they received the remittances.
3. All other instructions issued vide A. P. (DIR Series) Circular No. 89 dated March 12, 2013, as amended from time to time, will remain unchanged.
4. Authorised Persons (Indian Agents) may bring the contents of this circular to the notice of their constituents concerned.
5. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.
Yours faithfully,
(Rudra Narayan Kar)
Chief General Manager In-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/511 · issued 04 Mar 2014. The plain-English explanation above is BankPulse’s own independent summary.
Ensure your bank's MTSS systems can tag electronic transfers as foreign inward remittances with appropriate alerts.
📜 Compliance
Verify that beneficiary accounts at Recipient Banks are KYC compliant before crediting direct-to-account remittances.
Include accurate originator and beneficiary information in all electronic remittance messages throughout the payment chain.
Train staff on the new procedure and update internal MTSS guidelines to reflect the direct-to-account facility.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (Indian Agents under MTSS (Partner Banks), Recipient Banks holding beneficiary accounts, Overseas principals sending remittances under MTSS, Beneficiaries receiving foreign inward remittances), your first concrete step on “MTSS Direct-to-Account Remittances Allowed via NEFT/IMPS” is: “Ensure your bank's MTSS systems can tag electronic transfers as foreign inward remittances with appropriate alerts.” (RBI issued this 04 Mar 2014).
Circular: RBI/2013-14/511 -- MTSS Direct-to-Account Remittances Allowed via NEFT/IMPS
Issued: 04 Mar 2014
Action required: Ensure your bank's MTSS systems can tag electronic transfers as foreign inward remittances with appropriate alerts.
Action required: Verify that beneficiary accounts at Recipient Banks are KYC compliant before crediting direct-to-account remittances.
Action required: Include accurate originator and beneficiary information in all electronic remittance messages throughout the payment chain.
Action required: Train staff on the new procedure and update internal MTSS guidelines to reflect the direct-to-account facility.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8763&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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