The Reserve Bank of India (RBI) has introduced new regulations concerning cash pay-out services at banks, emphasizing the need for meticulous record-keeping of recipients. These changes are aimed at enhancing the transparency and accountability of cash transactions.
Revision of Domestic Money Transfer Framework
The RBI has updated its October 2011 framework for ‘Domestic Money Transfer.’ The revised norms are set to take effect from November 1, 2024.
Cash Pay-Out Service
According to the revised framework, banks providing cash pay-out services must now keep a detailed record of the beneficiary’s name and address. This measure ensures that all recipients of cash pay-outs are properly documented.
Cash Pay-In Service
For cash pay-in services, the RBI has stipulated that remitting banks and business correspondents (BCs) must register the remitter using a verified cell phone number and a self-certified ‘officially valid document (OVD)’ in compliance with know-your-customer (KYC) guidelines. Additionally, each transaction by a remitter must be validated through an additional factor of authentication (AFA).
Inclusion of Remitter Details
The RBI has also mandated that remitting banks should include remitter details in the IMPS (Immediate Payment Service) or NEFT (National Electronic Funds Transfer) transaction messages. This requirement aims to enhance the traceability of transactions.
Exclusion of Card-to-Card Transfer Guidelines
The guidelines concerning card-to-card transfers are not covered under the revised framework. This exclusion means that the new regulations specifically target cash pay-out and pay-in services, leaving card-to-card transfers unaffected.
Conclusion
The RBI’s updated norms for cash pay-out services reinforce the need for stringent documentation and validation processes, contributing to a more secure and transparent banking environment.
