The Reserve Bank of India or RBI has recently increased the limit of instant payment service (IMPS) Rs 2 lakh to Rs 5 lakh per transaction. The move has been announced to make big-ticket fund transfers more accessible. “Immediate Payment Service (IMPS) facilitates 24×7 instant domestic money transfer through various channels. RBI Governor Shaktikanta Das had said on October 8 this year that for the importance of the IMPS system and for enhanced consumer convenience, it is proposed to increase the per transaction limit from Rs 2 lakh to Rs 5 lakh.
Immediate Payment Service (IMPS) is managed by National Payments Corporation of India (NPCI). It is a payment method that provides 24×7 instant domestic fund transfer facility. IMPS can be accessed through various channels like Internet Banking, Mobile Banking App. Bank Branches, ATMs, SMS and IVRS.
However, IMPS is not the only way to transfer money instantly through banks across the country. National Electronic Funds Transfer (NEFT) and Real Time Gross Settlement (RTGS) are some of the other platforms that can be used to do the same thing in India. These transaction processes can be used by citizens at any time, and do not involve transfer of funds by bank employees.
Here is a closer look at the money transfer methods available in India.
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IMPS gives Indian citizens an opportunity to make instant money transfers through banks across the country. The service is available 24×7 and even on bank holidays.
“IMPS is a convenient way to send money, it offers round the clock instant domestic fund transfer. The enhanced range of IMPS will not only enhance the customer experience but will also solve more complex problems like credit and settlement risk due to RTGS infrastructure,” says Nitin Mathur, CEO, Tawaga Advisory Services.
For entities wishing to participate in IMPS, banks are required to have a valid banking or prepaid payment instrument license from the Reserve Bank of India. To avail this service the user has to register on Mobile Banking. IMPS uses IFSC code or Aadhaar number for smooth transaction.
Earlier, the maximum transaction limit for IMPS was Rs 2 lakh, but RBI has amended its guidelines. Now, a user can transfer up to Rs 5 lakh using this payment method. “These proposed changes reflect the acceptance of digital infrastructure across the country. These announcements also highlight the government’s desire to embrace the inevitable digital transformation at the earliest,” Mathur notes in this regard.
NEFT
The National Electronic Funds Transfer or NEFT system is owned and managed by the Reserve Bank of India. NEFT is a centralized payment system that operates across the country. It has pan-India coverage and includes a vast network of branches of all types of banks.
RBI has not imposed any limit on NEFT transactions. However, the user must ensure that his bank is part of the NEFT system before making the payment. Funds made through this platform are transferred in batches. These are then arranged into 48 half hour time slots.
The user has to log in to his bank portal and add the recipient as a beneficiary. Next, the beneficiary details have to be entered after which the money can be transferred to his account.
RTGS
In this system, fund transfer is done continuously and fixed in real time. This is done on an individual transaction-by-transaction basis, without netting. Hard paid RTGS are irreversible and final as the settlement of funds is in the books of Reserve Bank of India.
There is no upper limit in real time gross settlement, but a user has to transfer at least Rs 2 lakh through this platform.
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