RBI Issues Framework for Outward Remittance Services by Non-Bank Entities

A.P. (DIR Series) Circular No. 10, Dated: 13.05.2026

The Reserve Bank of India (RBI) has issued a comprehensive operating framework for facilitating outward remittance services by non-bank entities through Authorised Dealer (AD) Category-I banks in India. The framework aims to streamline remittance arrangements while ensuring regulatory oversight, customer protection and operational transparency.

1. Removal of Prior RBI Approval Requirement

Under the revised framework, Authorised Dealer (Category-I) banks are no longer required to obtain prior approval from the RBI before entering into tie-up arrangements with non-bank entities for facilitating outward remittance transactions. This move is expected to ease operational processes and promote greater participation in cross-border remittance services.

2. Role of Authorised Dealer Banks

AD Category-I banks facilitating such remittance arrangements must ensure that all transactions are conducted in accordance with the Foreign Exchange Management Act (FEMA), RBI directions and other applicable regulatory requirements. Banks will continue to remain responsible for regulatory compliance and due diligence in such arrangements.

3. Compliance and Due Diligence Requirements

The framework prescribes detailed compliance obligations for Authorised Dealers, including:

• Conducting proper due diligence of non-bank partner entities
• Ensuring adherence to Anti-Money Laundering (AML) and Know Your Customer (KYC) norms
• Monitoring transactions for suspicious activities
• Maintaining appropriate audit trails and transaction records

Banks are also required to establish internal controls and risk management mechanisms for overseeing such arrangements.

4. Customer Protection and Transparency Measures

To safeguard customer interests, the RBI has mandated various transparency and disclosure requirements. Customers must be clearly informed about:

• Applicable charges and fees
• Exchange rates
• Transaction timelines
• Terms and conditions governing remittance services

The framework also emphasises fair treatment of customers and mandates that all communications be transparent and non-misleading.

5. Grievance Redressal Mechanism

Authorised Dealer banks must put in place an effective grievance redressal mechanism for handling customer complaints related to outward remittance transactions facilitated through non-bank entities. Customers should have access to clearly defined complaint escalation channels and resolution timelines.

6. Data Privacy and Security Safeguards

The framework places significant emphasis on data protection and confidentiality. AD banks and partner entities must ensure:

• Secure handling and storage of customer data
• Compliance with applicable data privacy laws and cybersecurity standards
• Protection against unauthorised access, misuse or data breaches

Appropriate technology and operational safeguards must also be implemented to maintain the integrity and security of remittance transactions.

7. Operational Safeguards and Oversight

The RBI has directed Authorised Dealers to implement robust operational safeguards, including periodic monitoring, oversight mechanisms and review of tie-up arrangements. Banks must ensure that partner entities operate within the prescribed regulatory framework and maintain adequate systems and controls at all times.

8. Objective of the Framework

The operating framework is intended to facilitate ease of doing business in the remittance ecosystem while balancing innovation with regulatory compliance and customer protection. By removing the prior approval requirement and prescribing standardised safeguards, the RBI seeks to promote efficient and secure outward remittance services in India.

Click Here To Read The Full Circular