RBI Eases Outward Remittances Rules: What It Means For Users Sending Money Abroad

The Reserve Bank of India (RBI) has revised the rules governing outward remittance services offered through third-party online platforms linked to authorised dealer (AD) banks. Under the revised framework issued on May 13, 2026, non-banking entities no longer need prior approval from the RBI to partner with banks for facilitating overseas money transfers for non-trade current account transactions.

The central bank has instead placed the responsibility on authorised dealer banks to ensure compliance with the Foreign Exchange Management Act, 1999 (FEMA), customer protection norms, and Know Your Customer (KYC) rules.

The revised framework has applied to outward remittances carried out through websites, mobile applications, online platforms and software interfaces.

What Has Changed

Earlier, non-banking entities facilitating overseas remittances through banks needed specific approval from RBI before entering into such arrangements. RBI has now removed this approval process with immediate effect.

The revised framework covers non-trade current account transactions, such as education fees, medical expenses, travel-related payments, maintenance of relatives abroad, gifts, and subscriptions.

According to the circular, banks have remained fully responsible for ensuring that all transactions comply with FEMA regulations even if the service has been offered through a third-party platform.

Details Customers Must See

RBI has directed banks and third-party entities to provide clearer information to customers before a remittance is processed.

Customers must now be shown:

• The name of the AD bank handling the transaction

• The foreign exchange rate and its validity period

• A break-up of charges, including exchange rate mark-up and service fees

• The amount expected to be credited to the beneficiary

• The maximum time required for the transfer

• Customer grievance contact details

RBI has also asked banks to ensure that a detailed invoice is issued for every transaction. The invoice must include the exchange rate used, all applicable charges, the amount remitted and the expected delivery timeline.

Rules On Customer Funds And Data

The circular has said that remitters’ funds should not flow into the account of the third-party entity at any stage of the transaction. Funds must move directly from the sender’s bank account to the beneficiary’s bank account.

Banks have also been instructed to ensure the safety and privacy of customer data. Any collection of personal information by third-party entities must be need-based and carried out only with the customer’s explicit consent.

RBI has further said that banks and third-party platforms must comply with the Digital Personal Data Protection (DPDP) Act and cyber security standards prescribed by RBI and other agencies.

Banks are now required to publicly display their data storage policies, including what customer information is stored, the purpose behind storing it and the period for which it will remain stored.

Grievance Redressal And Tracking

Under the new framework, banks are required to establish a formal grievance redressal system for customers using such services.

RBI has also directed banks to ensure end-to-end settlement within the timeline promised to customers. In case of delays, customers should be able to track the status of their remittance transaction.

If the third-party platform facilitating the remittance is based outside India, it must be licensed by the relevant regulator in its home jurisdiction wherever such licensing is mandatory.

RBI has said that banks should also apply enhanced due diligence while dealing with countries identified under the Financial Action Task Force (FATF) monitoring frameworks.

FAQs

1. What payments have been covered under the new rules?
   The rules have covered overseas payments for education, travel, medical treatment, gifts and family maintenance.

2. Will users see all charges before sending money?
   Yes. Platforms must show exchange rates, mark-ups and service charges before the transfer is completed.

3. Can third-party apps hold customer money?
   No. Funds must be transferred directly through bank accounts.

4. Who will be held responsible for delays?
   The AD banks will be responsible for resolving any complaints about delays in the transaction process.