RBI Tightens KYC for Domestic Money Transfers

Mumbai: The Reserve Bank of India (RBI) on Wednesday tightened the know your customer (KYC) record requirements for domestic money transfer services. According to the revised framework, the remitting bank will have to obtain and keep a record of the name and address of the beneficiary for cash payout. Remitting banks/business correspondents shall register the remitter based on a verified cell phone number and a self-certified ‘officially valid document’ (OVD). 

The central bank said every transaction by a remitter should be validated by an additional factor of authentication (AFA). The remitting bank will have to include the remitter details as part of



the IMPS/NEFT transaction messages, which should now include an identifier to identify the fund transfer as a cash-based remittance.

The framework for domestic money transfer roles was introduced in 2011. There has been significant increase in the availability of banking outlets, developments in payment systems for funds transfers, and ease in fulfilling KYC requirements etc, since then; and now user have multiple digital options for funds transfer. A review was recently undertaken of various services facilitated in the current framework. Based on the review, these changes are being made, the RBI said.