The Reserve Bank of India has tightened Know Your Customer (KYC) record requirements for regulated firms that provide domestic money transfer services. The adjustments to the current framework were made following a recent examination of various payment transfer providers.
In a statement to authorized payment system operators, the Reserve Bank of India stated that the remitting bank must obtain and preserve a record of the beneficiary's name and address for cash payouts. Every transaction made by a remitter should be validated with an extra factor of authentication.
The rules governing the domestic money transfer section were implemented in 2021. Since then, there has been a huge growth in the number of banking outlets, advancements in payment technologies, and ease of meeting KYC standards. The regulator stated that consumers now have a variety of digital fund transfer choices.
The RBI stated that the remitting banks/business correspondents (BCs) must register the remitter using a confirmed mobile phone number and a self-certified 'Officially Valid Document' (OVD).
The bank transferring funds must include remitter information in the IMPS/NEFT transaction message. The transaction messages should include an identification that indicates the financial transfer is a cash-based remittance, it added. The remitting banks and BCs must comply with the terms of the Income Tax Act of 1961, as well as the corresponding laws and regulations governing cash deposits.
