RBI Consolidates Domestic Money Transfer Rules, Sets Cash Limits and Fraud Safeguards

The Reserve Bank of India (RBI) has consolidated its framework for domestic money transfers, allowing an individual to deposit up to ₹50,000 in cash at a bank branch for transfer through NEFT to another person’s bank account, even without maintaining an account with that bank. The framework also specifies that cash transfers through business correspondents, ATMs and other permitted channels are capped at ₹5,000 per transaction, with a monthly limit of ₹25,000 per remitter. For recipients, the maximum cash withdrawal is ₹10,000 per transaction, subject to a monthly limit of ₹25,000 per beneficiary. The RBI said the framework largely consolidates existing instructions rather than materially changing the transaction limits.

The framework also strengthens KYC, authentication and fraud-monitoring requirements. Customers using these facilities must register a verified mobile number and submit a self-certified officially valid document, while each transaction must undergo an additional factor of authentication. Banks and non-bank entities must monitor transaction frequency, issue alerts when funds are credited and investigate unusual increases in credits to individual accounts or groups of accounts. The framework is particularly relevant for migrant workers, daily-wage earners and people without regular banking access, while the enhanced monitoring requirements place greater responsibility on banks and payment entities to detect potential misuse of cash-based transfer channels.

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