Framework for Domestic Money Transfer (DMT)

The Reserve Bank of India (RBI) revised the Framework for Domestic Money Transfer (DMT) initially introduced in 2011.

Key Highlights of Revised Framework for Domestic Money Transfer (DMT)

• The revision was mandated under the Payment and Settlement Systems Act, 2007.
• This update was prompted by a significant enhancement in the availability of banking outlets and the evolution of payment systems which improved the ease of transferring funds.
• Notably, the ease in fulfilling KYC (Know Your Customer) requirements has been improved, providing users with multiple digital options for fund transfers.
• The revised framework includes stringent measures for transferring money. For instance, for Cash Pay-out Services, banks must obtain and record the beneficiary’s name and address.
• Cash Pay-in Services will now require banks or Business Correspondents (BCs) to register the remitter with a verified cellphone number and a self-certified Officially Valid Document (OVD).
• Each transaction must be authenticated by an Additional Factor of Authentication (AFA).
• Banks and their BCs must adhere to the Income Tax Act, 1961 provisions, focusing particularly on regulations related to cash deposits.
• Details of the remitter must be included in the IMPS/NEFT transaction messages, and these will now carry an identifier to denote the transaction as a cash-based remittance.
• The guidelines on Card-to-Card transfers are explicitly excluded from the DMT framework and will be governed under separate guidelines.
• All previous instructions from the 2011 circular, including transaction size limits, remain applicable.

Ref: Source

Frequently Asked Questions (FAQs):