In an effort to increase transparency and facilitate individual cross-border transfers, the Reserve Bank of India (RBI) has streamlined regulations governing international remittance collaborations between banks and fintech companies.
Authorized Dealer Category-1 (AD-1) banks and third-party organizations that facilitate outward remittances for non-trade purposes like education, travel, medical care, investments, and family maintenance abroad are no longer required to obtain prior approval under the updated framework.
AD-1 banks are now fully accountable to the central bank for ensuring compliance with the Foreign Exchange Management Act (FEMA) and KYC regulations. Additionally, banks are required to give clients precise information about exchange rates, markups, service fees, and anticipated transfer times.
Additionally, in order to lower insolvency and operational risks, customer remittance money must travel straight from the sender’s bank account to the overseas beneficiary, bypassing third-party accounts.
According to industry experts, the action is anticipated to enhance consumer experience, transparency, and regulatory clarity in international payments and indicates RBI’s growing confidence in India’s fintech ecosystem.
Between April 2025 and February 2026, India’s outgoing remittances under the Liberalized Remittance Scheme totaled $26.4 billion.
Source – Live Mint
