The Reserve Bank of India (RBI) has been making consistent efforts to achieve the objective of financial inclusion. There is a need to extend coverage to those who cannot open a bank account. It includes those working in far off places from home and have to transfer money to their families back home.

Now, transferring a small amount has been eased further. In order to help those who do not have a bank account, the RBI has eased the norms. It has doubled the transaction cap on small money transfers.

The relaxations in norms include:

Cash payout

Cash payouts of amounts transferred out of bank accounts to beneficiaries not having a bank account have been liberalised. There is an enhancement of transaction cap from the existing limit of Rs 5,000 to Rs 10,000. This is subject to an overall monthly cap of Rs 25,000 per beneficiary.

Banks to facilitate transfer

Banks are permitted to provide services that facilitate transfer of funds from accounts with them of their customers to recipients not having bank accounts at an ATM or through an agent appointed as a business correspondent. Banks can facilitate such fund transfers through any other authorised payment channel as well.

Banks can enable walk-in customers not having a bank account there to transfer funds to any of the accounts in the bank subject to a transaction limit of Rs 5,000 and a monthly cap of Rs 25,000 per remitter. A walk-in customer at a bank can also remit funds up to Rs 50,000 to the bank account of a beneficiary through the National Electronic Funds Transfer (NEFT). Such a walk-in customer needs to provide minimum details such as his name and complete address to the remitting bank.

Through cards

Banks can also enable transfer of funds between domestic debit, credit and pre-paid cards. These will be subject to the same monthly cap. The total outstanding amount on a prepaid payment instrument should not, at any point in time, exceed the limit prescribed by the RBI.

All these changes will benefit a large number of people who does not have access to formal banking channels. Such people faced difficulties in using authorised channels to transfer funds. According to the RBI, these relaxations will provide money transfer facilities in a safe, secure and efficient manner across the length and breadth of the country.

The RBI has asked banks and other financial institutions to put in place a system of safeguards, including velocity checks and alerts to customers about credit into accounts, using the new facility. Any unusual spurt in volume of credits in a particular account needs to be immediately investigated. Appropriate authorities will be alerted regarding suspicious transactions. The RBI has also directed that such fund transfers are to be effected on a real or near real time basis. All these steps will certainly give an impetus to the process of financial inclusion. (Economic Times)