RBI's new domestic money transfer rules: Transfer limits, KYC requirements and other details

New Delhi: The Reserve Bank of India (RBI) has issued fresh rules for domestic money transfers, governing how much money can be transferred through a bank to another person. The rules came into effect immediately on November 11, 2026.

The latest norms can be particularly useful for people who do not have a bank account. RBI introduced DMT to facilitate small-value fund transfers through formal banking channels, particularly for persons, including migrant workers, who lack access to such channels due to the absence of proof of identity or address.

The latest RBI (Domestic Money Transfer) Directions, 2026, would cover all Scheduled Commercial Banks, including Regional Rural Banks (RRBs), Urban Co-operative Banks, State Co-operative Banks, District Central Co-operative Banks, and Authorised Payment System Operators and System Participants.

The rules would not apply to card-to-card transactions, which are governed by the guidelines issued for payment instruments.

People with no bank account

To facilitate money transfers to recipients who do not have a bank account, money can be remitted through the customer's account and delivered in cash at an ATM, through an agent appointed as a Business Correspondent, or through any other authorised payment channel.

Business Correspondents are retail agents who provide basic banking services on behalf of a bank, particularly in areas where customers may not have easy access to a bank branch.

The remitting bank is required to record the name and address of the beneficiary.

This, however, comes with a limit on the amount that can be transferred in a month. Under the cash pay-out service, Rs 10,000 can be transferred in one transaction, subject to a monthly ceiling of Rs 25,000 per beneficiary.

Transfer to a bank account

The rules have a provision for walk-in customers at bank branches to remit funds of up to Rs 50,000 to a beneficiary's bank account through the National Electronic Funds Transfer (NEFT) system.

Banks can also allow customers to transfer money to a beneficiary's bank account through Business Correspondents (BCs), ATMs, etc., up to a maximum amount of Rs 5,000 per transaction, with a monthly cap of Rs 25,000 per remitter.

KYC and authentication

Remitting banks and Business Correspondents are required to register the remitter using a verified mobile phone number and a self-certified Officially Valid Document (OVD), as prescribed under the applicable RBI Know Your Customer Directions, 2025. Every transaction by a remitter has to be validated through an Additional Factor of Authentication (AFA). Also, the bank would include the remitter's details as part of the IMPS/NEFT transaction message.

Moreover, remitting banks and BCs must comply with the applicable provisions of the Income-tax Act, 2025.

Safeguards

In cases of frequent fund transfers to a beneficiary, prompt action would be taken. Such accounts would be investigated, and the authorities would be alerted about suspicious transactions.

Charges and grievances

Banks and non-banks may fix reasonable charges for Domestic Money Transfer services to popularise the facility, subject to the applicable conditions. They may also put in place appropriate systems for redressal of customer grievances arising from DMT services.