The Reserve Bank of India (RBI) has released a comprehensive set of regulations titled the 'Domestic Money Transfer Directions, 2026', which came into effect on November 11, 2026. The new framework consolidates existing rules governing small-value fund transfers, aiming to streamline processes for banking platforms, authorised agents, and migrant workers who may lack traditional bank accounts.
Under the updated guidelines, walk-in customers visiting bank branches can remit up to ₹50,000 to a beneficiary’s bank account using the National Electronic Funds Transfer (NEFT) system. For cash pay-out services, the central bank has set a limit of ₹10,000 per transaction, with a monthly cap of ₹25,000 per beneficiary. Additionally, customers using ATMs or Business Correspondents (BCs) to transfer funds to a beneficiary's account are limited to ₹5,000 per transaction, subject to a monthly limit of ₹25,000 per remitter.
The RBI has introduced several security safeguards, mandating that banks monitor the frequency of transactions and alert customers when funds are credited. Financial institutions are required to investigate any sudden surges in account activity and report suspicious transactions to relevant authorities. The remitting bank must also capture and store the beneficiary's name and address for audit purposes.
Inter-bank settlements for these transfers must be conducted exclusively through RBI-approved payment systems. While the central bank allows banks and non-bank entities to set reasonable charges for these services to encourage adoption, they must also establish formal grievance redressal systems for customers. The new directions specifically exclude card-to-card transfers from these provisions.
Key facts
- The 'Domestic Money Transfer Directions, 2026' became effective on November 11, 2026.
- Walk-in bank customers can remit up to ₹50,000 per transaction via NEFT.
- Cash pay-out service limits are set at ₹10,000 per transaction and ₹25,000 monthly per beneficiary.
- Transfers through ATMs or business correspondents are capped at ₹5,000 per transaction.
- Banks must comply with cash deposit provisions under the Income-Tax Act, 2025.
Why it matters
These new regulations are intended to bring small-value remittances into formal banking channels, providing a secure framework for individuals who previously lacked access to such services. By standardizing procedures and security protocols, the RBI aims to improve oversight of cash-based transfers while ensuring that migrant workers and other unbanked individuals can safely send money to family members across the country.
Source: Economic Times, Hindustan Times
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