TITLE: Reserve Bank of India Updates Master Direction on Money Transfer Service Scheme
BODY:
On November 28, 2025, the Reserve Bank of India (RBI) updated its Master Direction on the Money Transfer Service Scheme (MTSS), consolidating regulatory guidance for authorised persons facilitating cross-border personal remittances into India.
The MTSS enables quick transfer of personal remittances from abroad to beneficiaries in India through arrangements between overseas money transfer operators (Overseas Principals) and authorised Indian agents. The scheme permits only inward personal remittances, such as family maintenance payments and remittances favouring foreign tourists; outward remittances and trade-related transfers are prohibited. Individual remittances are capped at USD 2,500, with cash payments limited to Rs.50,000 unless exceptional circumstances apply.
Indian agents must be Authorised Dealer Category-I banks, Authorised Dealer Category-II entities, Full Fledged Money Changers (FFMCs), Scheduled Commercial Banks, or the Department of Posts, with minimum Net Owned Funds of Rs.50 lakh. Overseas Principals must maintain minimum net worth of USD 1 million and obtain necessary authorisation under the Payment and Settlement Systems Act, 2007. Collateral requirements equivalent to three days' average drawings or USD 50,000 (whichever is higher) apply.
The updated direction specifies that Indian agents may appoint sub-agents and must conduct quarterly due diligence checks. Permissions are issued initially for one year and renewable for one to three years. Know Your Customer (KYC), Anti-Money Laundering (AML), and Combating the Financing of Terrorism (CFT) compliance requirements apply to all participants. The RBI consolidated multiple circulars dating from 2006 through November 2025 into this single master direction, with recent modifications addressing KYC procedures and application submission processes through the APConnect platform.