The Reserve Bank has revised the extant regulatory framework guiding domestic money transfer services by making the know your customer (KYC) record requirements stringent after a review of the current framework guiding various payments and money transfer services.
In the new framework issued Wednesday, the RBI wants the remitting bank to obtain and keep a record of the name and address of the beneficiary for cash payout.
In a communication to authorised payment system operators, the central bank said every transaction by a remitter should be validated by an additional factor of authentication (AFA).
Domestic money transfer roles were introduced in 2021 and since then, there has been a significant increase in the availability of banking outlets, developments in payment systems and ease in fulfilling KYC requirements. Now users have multiple digital options for funds transfer, the regulator said.
Now the remitting banks/business correspondents shall register the remitter based on a verified cell phone number and a self-certified ‘officially valid document’ (OVD), the RBI said.
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, it added.
The remitting bank and BC also have to conform to provisions of the Income Tax Act, 1961, and the related rules and regulations pertaining to cash deposits.