The Reserve Bank of India (RBI) has consolidated its domestic money transfer regulations into a single framework, retaining existing cash transaction limits while strengthening security and monitoring requirements. The new directions aim to make cash-based remittances through formal banking channels more secure and transparent.
Under the RBI (Domestic Money Transfer) Directions, 2026, issued on November 11, customers can continue to transfer up to ₹50,000 in cash through NEFT at bank branches, even if they do not hold an account with the bank handling the transaction.
The framework brings together earlier instructions and clarifies the rules for cash-based money transfers through banks, Business Correspondents (BCs), ATMs and other authorised channels.
How much cash can customers transfer?
The RBI has specified different transaction limits depending on the channel used.
- Bank branches: Walk-in customers can transfer up to ₹50,000 in cash to a beneficiary’s bank account through NEFT.
- Business Correspondents and ATMs: Cash transfers are limited to ₹5,000 per transaction, with a monthly ceiling of ₹25,000 per remitter.
- Cash payouts: Beneficiaries without bank accounts can receive up to ₹10,000 per transaction, subject to a monthly limit of ₹25,000 per beneficiary.
These limits were already part of the existing framework and have been retained under the consolidated directions.
Additional authentication made mandatory
The RBI has strengthened sender verification requirements for cash-based transfers. Remitting banks and Business Correspondents must register customers using a verified mobile number and a self-certified Officially Valid Document (OVD), in accordance with applicable KYC rules.
Every transaction must also be validated through an Additional Factor of Authentication (AFA). The remitter’s details must be included in the NEFT or IMPS transaction message, along with an identifier marking the transfer as a cash-based remittance.
Banks to strengthen fraud monitoring
The central bank has directed banks and non-bank payment service providers to establish stronger monitoring systems, including transaction-frequency checks and customer alerts for incoming credits.
Any unusual increase in the volume of credits into an individual account or a group of accounts must be investigated immediately. Suspicious transactions must be reported to the appropriate authorities.
The RBI has also specified that transfers under the framework should be processed in real time or near real time. Inter-bank settlements must take place through RBI-approved payment systems.
Which institutions are covered?
The directions apply to scheduled commercial banks, including regional rural banks, urban co-operative banks, state co-operative banks and district central co-operative banks. Authorised payment system operators and participants are also covered wherever the provisions apply to their domestic money transfer services.
Banks and non-bank entities may decide reasonable charges for these services and are required to provide appropriate grievance redressal mechanisms. Card-to-card transfers remain outside the scope of the new framework.
The consolidated directions replace earlier RBI instructions issued in 2011 and 2024, bringing domestic money transfer services under a single regulatory structure.
