The Reserve Bank of India (RBI) has brought domestic cash-based money transfer services under a consolidated regulatory framework, laying down clear rules for sending and receiving money through banking channels. The Domestic Money Transfer Directions, 2026, cover cash transactions carried out through bank branches, ATMs and authorised banking agents. The framework specifies how much money an individual can transfer or collect, the identity verification procedures required and the conditions applicable to service providers. Although the directions consolidate earlier instructions rather than introduce new transaction ceilings, customers who depend on cash remittances should familiarise themselves with the rules.
The Domestic Money Transfer Directions, 2026, issued on November 11, bring together the regulatory provisions governing domestic remittances involving physical cash. The framework addresses two types of services: cash pay-in, through which a sender deposits money for credit to another person’s bank account, and cash pay-out, which allows a beneficiary to collect money in cash without necessarily having a bank account.
The distinction is important for people who regularly send money to family members or relatives who may not have access to conventional banking facilities. By bringing both services under one set of instructions, the RBI aims to establish uniform requirements for banks and other authorised participants.
Customers depositing cash for transfer to another person’s bank account through the specified cash pay-in facility must adhere to two limits. The maximum amount permitted in a single transaction is ₹5,000, while one sender can transfer a maximum of ₹25,000 in a month through this facility.
The service is available through authorised Business Correspondents (BCs) and ATMs, subject to the applicable arrangements. BCs are banking representatives authorised to provide basic financial services outside traditional bank branches.
For example, a person sending money to a relative can carry out multiple transactions during the month, but no individual transfer can exceed ₹5,000 and the cumulative amount cannot go beyond ₹25,000. These restrictions relate to cash-based remittances and do not represent the general transaction limits for digital payments or regular bank transfers.
The RBI framework also provides a mechanism for people without bank accounts to access money sent to them through domestic remittance services. Under cash pay-out provisions, a beneficiary can collect up to ₹10,000 in one transaction. However, the total amount received through this facility cannot exceed ₹25,000 in a month.
The facility allows money transferred from a bank account to be collected in physical currency through permitted channels, including ATMs and authorised Business Correspondents.
This can be particularly useful for migrant workers who send money home or individuals whose family members live in areas with limited banking access. The recipient can collect the remitted amount without opening a bank account, provided the prescribed conditions are met.
The cash remittance facility available at bank branches carries a separate transaction limit. Walk-in customers can transfer up to ₹50,000 per transaction through the National Electronic Funds Transfer (NEFT) system under the specified arrangement.
This is considerably higher than the ₹5,000 limit applicable to cash pay-in transactions through ATMs and Business Correspondents. Customers looking to remit larger sums in cash can therefore use the branch-based option, subject to the bank’s procedures.
It is important to note that this ceiling applies to the specified cash-based remittance service and not to ordinary NEFT transfers initiated directly from bank accounts.
Identity verification is another key component of the RBI’s consolidated instructions. Anyone using the cash pay-in facility must be registered with a verified mobile number and a self-certified Officially Valid Document (OVD), in line with applicable KYC requirements. Such documents are officially recognised for establishing an individual’s identity.
The RBI has also mandated an Additional Factor of Authentication (AFA) for every cash pay-in transaction. This means the transaction must undergo an additional verification step before it can be processed.
Furthermore, banks must ensure that the relevant IMPS or NEFT transaction messages contain details indicating that the money originated through a cash-based remittance facility. This requirement helps identify and distinguish cash-funded transfers from regular account-based transactions.
Banks must also comply with the applicable provisions relating to cash deposits under the Income-tax Act, 2025.
Customers using domestic money transfer services may have to pay transaction fees. The new directions allow banks and non-bank service providers to decide reasonable charges for offering these facilities. The amount payable may differ depending on the institution, transaction method and service being used.
Customers should confirm the applicable fee before depositing cash or initiating a transfer. In case of a failed transaction, delay or other service-related issue, they can approach the concerned bank or service provider through its grievance redressal system. Eligible complaints against regulated entities can also be taken up under the RBI-Integrated Ombudsman Scheme, 2026, subject to the scheme’s conditions.
Despite the introduction of the 2026 directions, the prescribed transaction ceilings have not been increased or reduced. The RBI has consolidated instructions that were originally issued on October 5, 2011, and subsequently reviewed on July 24, 2024. The latest framework updates and brings together the existing provisions, including references to the KYC Directions, 2025, the Income-tax Act, 2025, and the Ombudsman Scheme, 2026.
Therefore, the ₹5,000 per-transaction and ₹25,000 monthly limits for cash pay-in, along with the ₹10,000 per-transaction and ₹25,000 monthly limits for cash pay-out, continue to apply. For customers, the primary change is the consolidation of the regulatory requirements rather than a revision of the amount they can send or receive.
The RBI issued the Domestic Money Transfer Directions, 2026, on November 11, and the provisions became effective from the same date. The framework covers scheduled commercial banks, including Regional Rural Banks, cooperative banks, and authorised payment system operators and participants involved in domestic money transfer services.
Card-to-card transfers have been kept outside the scope of these instructions. Customers using cash-based remittance services should check the applicable limits, complete the required verification and confirm any service charges before initiating transactions. Understanding the distinction between cash pay-in, cash pay-out and branch-based remittances will help them choose the appropriate channel for sending or receiving money.