Mumbai: With a view to facilitating fund transfers to people, particularly migrants, who do not have bank accounts, the Reserve Bank of India (RBI) on Wednesday relaxed norms by doubling the transaction cap on small money transfers.
Under the new norms, the cash pay-out arrangements for amounts being transferred out of bank accounts to beneficiaries not having a bank account has been enhanced to Rs 10,000 from the current limit of Rs 5,000. The monthly cap on such transfer will be Rs 25,000 per beneficiary, RBI said in a notification.
Besides, customers not having bank account can now transfer funds to bank accounts of others, subject to a transaction limit of Rs 5,000 and a monthly cap of Rs 25,000 per remitter.
A file photo of farmers outside a rural branch of SBI
The RBI has also allowed transfer of funds among domestic debit/credit/pre-paid cards with the cap of Rs 5,000 per transaction and a monthly limit of Rs 25,000.
According to experts, the changes will impact a large number of people, especially the migrant population which does not have access to formal banking channels for want of proof of identity/address.
The RBI said such people faced difficulties in using the authorized channels for transferring funds.
“RBI has been receiving frequent representations to open up the formal banking channel to facilitate fund transfers of small value, subject to monthly ceilings and monitoring, to give impetus to the process of financial inclusion. We are issuing these guidelines after having reviewed the related issues.
“These relaxations are expected to provide money transfer facilities in a safe, secure and efficient manner across the length and breadth of the country,” the apex bank said.
Migrants constitute a substantial chunk of the country’s population.
The RBI has asked banks and other financial institutions to put in place a system of safeguards, including velocity checks and alerts to customers about credit into accounts, using the new facility. “Any unusual spurt in volume of credits in a particular account/group of accounts shall be immediately investigated. Appropriate authorities shall be alerted regarding suspicious transactions,” it said.