MICROCAPITAL BRIEF: Reserve Bank of India Relaxes Money Transfer Caps, Allows Non-Account Holders to Send Money Via Banks

The Reserve Bank of India has relaxed several guidelines on domestic money transfers. Walk-in customers without a bank account will now be allowed to transfer funds to bank accounts. Fund transfers among domestic debit, credit and prepaid cards will also be permitted under the new guidelines. Both transaction types will be subject to a maximum of INR 5,000 (USD 97) per transaction and a monthly cap of INR 25,000 (USD 487) per remitter.

The transaction cap for amounts being transferred from bank accounts to beneficiaries who do not have a bank account has been increased from INR 5,000 (USD 97) to INR 10,000 (USD 194), with an overall monthly cap of INR 25,000 (USD 487) per beneficiary.

By Kristha Abores, Research Associate

About Reserve Bank of India (RBI):
Established in 1935, the Reserve Bank of India (RBI) undertakes consolidated supervision of the financial sector comprising commercial banks, financial institutions and non-banking finance companies (NFBCs). The current focus of RBI is to supervise financial institutions, consolidate accounting standards, resolve legal issues in cases of banking fraud, monitor non-performing assets and supervise the rating model for the banking sector. In 1979, the National Bank for Agriculture and Rural Development (NABARD) was formed at the behest of RBI to provide regulatory oversight to regional rural banks (RRBs) and to promote the development of agricultural lenders: tasks that had been the responsibility of RBI. While all microfinance institutions (MFIs) and non-banking financial companies still operate under RBI regulations, the responsibility for inspecting nonprofit MFIs, agricultural lenders, RRBs, state cooperative banks, district central cooperative banks and state cooperative agricultural and rural development banks was transferred to NABARD. RBI maintains these responsibilities for for-profit MFIs. Although RBI was originally the parent organization of NABARD and until October 2010 held a 72.5 percent stake in the outfit, RBI owns a one-percent stake in NABARD as of 2011.

Sources and Additional Resources:

[1] Reserve Bank of India: “Domestic Money Transfer – Relaxations,” http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=6750&Mode=0

MicroCapital.org article, June 6, 2011, “MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Mandates Personal Guarantees from Promoters of Microfinance Institutions (MFI) Looking to Restructure Debt,” https://www.microcapital.org/microcapital-brief-reserve-bank-of-india-rbi-mandates-personal-guarantees-from-promoters-of-microfinance-institutions-mfi-looking-to-restructure-debt/

MicroCapital.org article, March 14, 2011, “MICROCAPITAL BRIEF: India’s Andhra Pradesh State to Tighten Local Microfinance Institutions (Regulation of Moneylending) Act,” https://www.microcapital.org/microcapital-brief-indias-andhra-pradesh-state-to-tighten-local-microfinance-institutions-regulation-of-moneylending-act/

MicroCapital.org article, January 26, 2011, “MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Subcommittee Proposes Regulation for Microfinance Institutions (MFI),” https://www.microcapital.org/microcapital-brief-reserve-bank-of-india-rbi-subcommittee-proposes-regulation-for-microfinance-institutions-mfi/

MicroCapital.org article, December 17, 2010, “MICROCAPITAL BRIEF: Local Government in Indian State of Andhra Pradesh Considers Additional Microfinance Regulation, Requires Disclosure of Operational Procedures,” https://www.microcapital.org/microcapital-brief-local-government-in-indian-state-of-andhra-pradesh-considers-additional-microfinance-regulation-requires-disclosure-of-operational-procedures/

MicroCapital.org article, November 16, 2010, “MICROCAPITAL BRIEF: Under Pressure from State Government of Andhra Pradesh, Indian Microfinance Institutions Agree to Cap Interest Rates at 24%,” https://www.microcapital.org/microcapital-brief-under-pressure-from-state-government-of-andhra-pradesh-indian-microfinance-institutions-agree-to-cap-interest-rates-at-24/

MicroCapital Universe Profile: Reserve Bank of India (RBI), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Reserve+Bank+of+India+%28RBI%29

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

 

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