Hello friends! First and foremost, I wish you all a very Happy Diwali! May this festival bring you joy, peace, and prosperity, and may your business thrive in the coming year. I hope you all enjoy good health as well. Once again, heartfelt wishes for a joyous Deepavali celebration!
As regular viewers of our content, you may recall that a few months ago, we shared important information regarding the guidelines issued by the Reserve Bank of India (RBI) for Domestic Money Transfers (DMT). This initiative aims to establish a framework to ensure secure money transfers within India.
Why the Change?
The primary reason for the new guidelines is the increasing incidence of illegal activities associated with money transfers, such as terror funding and hawala transactions. Previously, there were significant issues with tracking the sender of funds, leading to concerns about the security and legality of transactions. To address these problems, the RBI has introduced a comprehensive set of guidelines, which will be mandatory for all banks.
Key Changes to the DMT Process
Enhanced KYC Requirements
Starting from November 1, 2024, all users will be required to comply with new KYC (Know Your Customer) norms that mandate the linking of transactions to Aadhaar numbers. When registering a sender, the mobile number used will need to be linked to their Aadhaar, ensuring that all personal information, such as name and address, is accurately captured. This will significantly reduce the likelihood of fraud and misuse of the DMT system.
Transaction Limitations
Under the previous system, senders could transfer substantial amounts without thorough verification, often leading to the use of the system for illegal activities. Now, if a sender wishes to transfer amounts between ₹1 to ₹5,000, they will receive a One-Time Password (OTP) to complete the transaction. For amounts exceeding ₹5,000, separate OTPs will be required for each segment of the transaction. For instance, if someone wishes to send ₹10,000, the amount will be split into two transactions of ₹5,000 each, necessitating two OTPs.
Revised Sender Registration Process
In the past, once a sender was registered, they could transfer money using just their mobile number. This lack of stringent verification opened up the system to misuse, allowing individuals to add multiple accounts under one registration without proper checks. With the new guidelines, even if a sender wishes to send a small amount, they will need to verify their identity with an OTP sent to their registered mobile number.
Additional Charges for E-KYC
As part of the new framework, there will be a nominal charge for the e-KYC process, which can go up to ₹10. This fee will be deducted from the sender’s account during the registration process, ensuring the system remains robust and secure.
Implementation Timeline
It’s important to note that while the RBI has set a deadline for November 1, 2024, the implementation may vary among banks and DMT portals. Some may adopt the new guidelines immediately, while others may take a few days or even weeks to adjust their systems. Therefore, users should be prepared for a transition period where they may encounter both old and new procedure
The recent updates to the DMT process introduced by the RBI are aimed at improving the security and integrity of money transfers within India. These changes are crucial in combating illegal activities and ensuring that users can trust the systems they rely on for financial transactions.
If you engage in money transfers via any platform, it’s essential to stay informed about these updates. The changes might initially seem inconvenient, but they are designed to protect users and enhance the overall security of financial transactions. Thank you for reading, and I hope you find this information helpful!
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