The Reserve Bank of India (RBI) in a review of Domestic Money Transfer framework has made it tougher for transfer of money in banking channel by account holders. It has issued a new circular detailing the changes which will come into effect from November 1.

The framework for Domestic Money Transfer (DMT) was introduced in 2011.

The RBI in the circular said, “There has been significant increase in the availability of banking outlets, developments in payment systems for funds transfers, and ease in fulfilling KYC requirements etc., since then; and now, users have multiple digital options for funds transfer.”

“A review was recently undertaken of various services facilitated in the current framework. Based on the review it has been decided that for Cash Pay-out Service the remitting bank will need to obtain and keep a record of the name and address of the beneficiary.

For Cash Pay-in Service remitting banks / Business Correspondents (BCs) will need to register the remitter based on a verified cell phone number and a self-certified ‘Officially Valid Document (OVD)’ as per a previous Master Direction.

“Every transaction by a remitter will be validated by an Additional Factor of Authentication (AFA),” the RBI said. 

Remitting banks and their BCs will need to conform to provisions of the Income Tax Act, 1961 and the rules / regulations framed thereunder (as amended from time to time), pertaining to cash deposits, it added. 

Remitter bank will need include remitter details as part of the IMPS / NEFT transaction message. The transaction message will include an identifier to identify the fund transfer as a cash-based remittance, it further said. 

As per the circular the guidelines on Card-to-Card transfer are excluded from the purview of the DMT framework and will be governed under the guidelines / approvals granted for such instruments.

All other instructions in the above circular dated October 5, 2011 including the limits in size of transactions will continue to be applicable.