Business correspondents urge RBI to ease domestic transfer limits and rules
Business correspondents (BCs)-who process thousands of crores of rupees daily in domestic remittances-have urged the Reserve Bank of India (RBI) to relax the restrictions it had imposed on monthly and daily transfers 14 years ago, according to people aware of the development.
They have written to the RBI, requesting it to double the monthly transfer limit to ₹50,000 and reduce the requirement of a two-factor authentication (2FA) to once a month from it being needed for every transaction now, the people cited earlier told ET.
This comes after the BCs complained to the regulator about the misuse of its latest domestic money transfer rules that mandate KYC (know-your-customer) checks of every remitter.
The BCs have told the RBI that miscreants have been using the API (application programming interface) of payment gateways to offer uncontrolled remittances in violation of TDS (tax deduction at source) and GST (goods and services tax) rules.
«We have flagged off several instances to the RBI where we came across people who are using API from the payment gateways for vendor settlement and remitting money without being registered as a business correspondent,» an industry executive told ET.«In some cases, even ₹5 lakh has been remitted without any checks and balances. The issue is that if you don't relax the guardrails on time, then genuine users will find alternatives.»
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