The Reserve Bank of India ( RBI ) has announced stricter regulations for cash pay-out services at banks, which will take effect from November 1, 2024. Under the revised framework for ‘Domestic Money Transfer,’ remitting banks are now required to maintain records of recipients’ names and addresses for cash pay-outs.
On Wednesday, the RBI implemented tighter norms related to cash pay-out services at banks, mandating lenders to keep records of recipients. Cash pay-out refers to transferring funds from bank accounts to beneficiaries who do not have a bank account. The revised norms update the RBI’s October 2011 framework for ‘Domestic Money Transfer,’ and will be effective from November 1, 2024.
Record-Keeping: For cash pay-out services, remitting banks must obtain and keep a record of the beneficiary’s name and address.
Cash Pay-In Service: Remitting banks/business correspondents ( BCs ) will register the remitter using a verified cell phone number and a self-certified ‘officially valid document ( OVD )’ as per the Know Your Customer (KYC) guidelines.
Transaction Validation: Every transaction by a remitter should be validated by an additional factor of authentication (AFA).
Remitter Details: Remitter banks must include remitter details as part of the IMPS/NEFT transaction message.
The guidelines on card-to-card transfers are excluded from the scope of this framework.
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