Reserve Bank of India (Domestic Money Transfer) Directions, 2026

The Reserve Bank of India (RBI) has issued the Domestic Money Transfer Directions, 2026, to harmonise and consolidate existing guidelines for small-value fund transfers through formal banking channels. These directions apply to all scheduled commercial banks, including regional rural banks, urban and state co-operative banks, and authorised payment system operators. The framework aims to facilitate fund transfers for individuals, particularly migrant workers, who may lack access to formal banking due to identity or address proof constraints. The RBI has invoked powers under the Payment and Settlement Systems Act, 2007, to issue these directions in the public interest.

Under the new directions, banks are permitted to offer cash pay-out services to recipients without bank accounts, subject to transaction limits. The maximum amount for cash pay-out is ₹10,000 per transaction, with an overall monthly ceiling of ₹25,000 per beneficiary. Walk-in customers can remit up to ₹50,000 to a beneficiary’s bank account via NEFT, while transfers through business correspondents or ATMs are capped at ₹5,000 per transaction, with a monthly limit of ₹25,000 per remitter.

Remitting banks and business correspondents must register remitters using a verified mobile number and a self-certified Officially Valid Document, as per RBI’s Know Your Customer Directions, 2025. Every transaction requires validation through an Additional Factor of Authentication (AFA). Banks must also comply with income tax provisions related to cash deposits and include remitter details in transaction messages, with an identifier to classify the transfer as cash-based.

The RBI mandates robust safeguards, including velocity checks and customer alerts for credits into accounts. Any unusual surge in transaction volumes must be investigated immediately, and suspicious transactions should be reported to appropriate authorities. Fund transfers under these directions are expected to occur in real-time or near-real-time, with inter-bank settlements processed exclusively through RBI-approved payment systems.