RBI Revised Domestic Money Transfer Framework

Current Context: On 24th July 2024, The Reserve Bank of India (RBI) issued a new framework on Domestic Money Transfer (DMT) for regulated firms, making stricter Know Your Customer (KYC) record standards, focusing on banking services and payment systems.

• These updated guidelines will come into effect from November 1, 2024.
• The changes aim to enhance the security of domestic money transfers within India.
• Here are some key points:
• Cash Pay-out Service: Remitting banks will now obtain and maintain records of the name and address of the beneficiary for cash payouts.
• Cash Pay-in Service: Remitting banks or Business Correspondents (BCs) will verify the remitter using a verified mobile phone number and a self-certified ‘Officially Valid Document (OVD)’ as specified in the Master Direction - Know Your Customer Direction 2016.
• Additional Factor of Authentication (AFA): Every transaction by a remitter must be validated by an AFA.
• Income Tax Act Compliance: Remitting banks and their BCs must follow the provisions of the Income Tax Act of 1961 regarding cash deposits.

Question:

1 How will remitters be verified for cash pay-in services under the new Domestic Money Transfer framework?

• A) With a verified mobile number and an OVD
• B) With a PAN card and Aadhaar card
• C) With a passport and driving license
• D) With a fingerprint and iris scan

Answer: A) Remitting banks or Business Correspondents (BCs) will verify the remitter using a verified mobile phone number and a self-certified ‘Officially Valid Document (OVD)’ as specified in the Master Direction - Know Your Customer Direction 2016.