KYC must for walk-in money transfers to check frauds: RBI – Times of India

MUMBAI: In a bid to prevent fraudsters from using the money transfer route for laundering, RBI has tightened rules for money transfers and has asked banks to obtain KYC details of remitters and beneficiaries.
Earlier, RBI’s money transfer rules allowed walk-in customers without bank accounts to transfer funds subject to a transaction limit of Rs 5,000 and monthly cap of Rs 25,000 per remitter.The new rules specify that remitting banks and business correspondents must register the remitter based on verified cell phone number and a self-certified ‘officially valid document (OVD)’ according to updated KYC directions.
The new rules also introduce an additional factor authentication for every transactions. RBI has asked banks and business correspondents to conform to the provisions of the I-T Act and include remitter details as part of the IMPS/NEFT transaction message, identifying the transaction as a cash based remittance.
“There has been significant increase in the availability of banking outlets, developments in payment systems for funds transfers, and ease in fulfilling KYC requirements etc., since then; and now users have multiple digital options for funds transfer,” RBI said. . RBI has said that changes will come into effect from Nov 1, 2024.
RBI’s measures are part of an initiative to combat the use of banking channels for transferring fraudulent proliferation of online fraud across the country. Fraudsters deceive customers into transferring funds to third-party accounts, which are subsequently withdrawn using money mules.