RBI consolidates money transfer rules: Check cash limits and KYC norms

The Reserve Bank of India (RBI) has consolidated rules on domestic money transfers, setting out how people can send and receive money through banks, business correspondents and other authorised channels, even without having a bank account.

Under the RBI (Domestic Money Transfer) Directions, 2026, issued on November 11 and effective immediately, customers can send cash for credit to another person’s bank account or arrange for beneficiaries without bank accounts to collect money in cash. The framework specifies transaction and monthly limits for these services and strengthens safeguards against misuse.

The directions help migrant workers, daily wage earners and people who need to send money to family members in other parts of the country but may not have access to regular banking facilities.

The new framework largely consolidates existing instructions rather than introducing substantial changes to transaction limits.

How much cash can you send without a bank account?

The RBI has prescribed different limits depending on the channel used to transfer money.

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1. Cash transfers through bank branches

A person visiting a bank branch can transfer up to Rs 50,000 to a beneficiary's bank account through the National Electronic Funds Transfer (NEFT) system.

This facility is available to walk-in customers, including those who do not maintain an account with the bank handling the transaction.

2. Cash transfers through business correspondents and ATMs

Customers can also use business correspondents (BCs), ATMs and other permitted channels to deposit cash for transfer to a beneficiary's bank account.

The limits are:

• Maximum Rs 5,000 per transaction.
• Monthly limit of Rs 25,000 per remitter.

Customers using these channels must register with a verified mobile number and submit a self-certified officially valid document, in accordance with RBI’s Know Your Customer (KYC) requirements.

An additional factor of authentication is also mandatory for every transaction.

How much money can a person without a bank account receive?

The RBI has also specified limits for cash pay-out services, under which money sent from a bank account can be collected in cash by a beneficiary who does not have a bank account.

The recipient can withdraw the money through an ATM, a business correspondent or another authorised payment channel.

The limits are:

• Maximum Rs 10,000 in a single transaction.
• Monthly limit of Rs 25,000 per beneficiary.

The bank sending the money must record and maintain the beneficiary's name and address.

This facility can help people who receive financial support from family members working in other cities but do not have their own bank accounts.

What safeguards has RBI introduced?

The central bank has directed banks and non-bank entities to establish monitoring systems to prevent fraud and misuse of cash-based transfers.

These include checking transaction frequency, sending alerts when money is credited to an account and investigating unusual increases in the number of credits into a particular account or group of accounts.

Banks and business correspondents must also comply with applicable cash deposit provisions under the Income-tax Act, 2025.

For transfers through NEFT and the Immediate Payment Service, the remitter’s details must be included in the transaction message, with the transfer clearly identified as a cash-based remittance.

Every transaction must be processed in real time or as close to real time as possible. Inter-bank settlements must take place through payment systems approved by the RBI.

Will banks charge for these transfers?

Banks and non-bank entities can decide reasonable charges for providing domestic money transfer services. The RBI has allowed them to determine their charges with a view to encouraging wider use of the facility.

They must also establish appropriate grievance redressal mechanisms to address customer complaints.

Card-to-card transfers are excluded from the new directions and will continue to be governed by the rules applicable to the respective payment instruments.

Which institutions must follow the new rules?

The directions cover scheduled commercial banks, including regional rural banks, urban co-operative banks, state co-operative banks and district central co-operative banks.

Authorised payment system operators and participants are also covered, wherever the provisions apply to their domestic money transfer services.

For customers, the main distinction is between sending cash for credit to a bank account and receiving cash without maintaining one. The applicable limits depend on the channel used, making it important to check the transaction ceiling before initiating a transfer.