Mumbai: The Reserve Bank of India (RBI) has tightened regulations on cash pay-out services by requiring banks to maintain detailed records of recipients. Cash payments refer to the transfer of funds from bank accounts to individuals without bank accounts.
The RBI has updated its October 2011 framework for 'domestic money transfer' to include these new record-keeping requirements.
New rules to be applicable from November 1
The new rules will come into effect from November 1, 2024. For cash pay-out service, the revised framework said, "The remitting bank shall obtain and keep a record of the name and address of the beneficiary".
In the case of cash payment service, the RBI said that the sending bank/business correspondent (BCs) will register the sender on the basis of a verified cell phone number and self-certified 'officially valid document (OVD)' as per Know Your Customer (KYC) instructions.
Every transaction should be validated by AFA
The new norms also state that every transaction made by the sender should be validated by an additional factor of authentication (AFA). In addition, the sender bank should include the details of the sender as part of the IMPS/NEFT transaction message, RBI said.
However, the guidelines on card-to-card transfer are excluded from the purview of the framework.
(With PTI inputs)
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