Remittances via payment vehicles plunge as KYC norms get tougher
remittances through payment vehicles have dropped nearly 25-30% in November and December after the Reserve Bank of India (RBI) directed lenders to maintain detailed records of recipients, industry executives told ET. These new domestic money-transfer rules, which kicked in from November 1, are aimed at preventing the misuse of banking channels for online frauds.
ET Year-end Special Reads
Two sectors that rose on India's business horizon in 2024
2025 outlook: Is it time for cautious optimism or rekindling animal spirits?
2024: Govt moves ahead with simultaneous polls plan; India holds largest democratic exercise
All leading players in the domestic money transfers (DMT) business, such as Fino Payments Bank, Airtel Payments Bank, NSDL Payments Bank, Spice Money, PayNearby, FIA Technology, and PayPoint, have seen a drop in business, said the executives cited above.
«Implementing the new RBI guidelines is tough, and we had hoped the regulator would give us an extension,» said an industry participant. «We have put in place APIs to conduct KYC of the remitter and store records of the recipient, but it's a cumbersome process. In the November and December period, business is down 30% month-on-month.»
Fino Payments Bank, one of the largest listed players in the domestic remittance business, has seen business drop more than 30% in November and December, industry sources revealed. Fino processes more than ₹3,500 crore in remittances every month. At the end of the September quarter, Fino had processed domestic transfers worth
