Lately, the government of India has been taking steps to boost cashless transactions in the country with its Digital India movement. Payment methods like IMPS and UPI are now on the rise, thanks to cheap transactional charges.
What is IMPS?
IMPS stands for Immediate Payment Service which is provided by the NPCI (National Payment Corporation of India). This facility helps people to send and receive funds on a real-time basis. It facilitates inter-bank transactions with the help of mobile and internet banking.
IMPS is one of the best modes for quick transfer of funds in the country. It is available 24/7 and 365 days, including public holidays. However, there is a limit of Rs 2 lakh on using IMPS.
Some features of IMPS
1. It is available 24/7 and 365 days, making it available anytime and any day within the comfort of your house.
2. The fund transfer is done through mobile banking and online banking. For that, there is a requirement of bank account details such as account number, IFSC code etc.
3. The service is not only limited to sending and receiving money but also used for shopping, merchant payments, fees payment, insurance premium payment, OTC payment, travel and ticketing and utility bill payments.
4. As the name suggests, the transfer of funds is "instant," that is, in real-time. However, it could take a while if there are any server technical difficulties.
5. IMPS is available using account number or using MMID (Mobile Money Identifier). The MMID is many using the mobile banking facility which limits the transaction amount to Rs 5,000. In case of IMPS using account number, such a transfer can be made using net banking and the a transfer of up to Rs 2 lakh can be made. For amount higher than Rs 2 lakh, one can opt for NEFT (National Electronic Funds Transfer) and for an amount over Rs 10 lakh, opt for RTGS (Real Time Gross Settlement). Note that NEFT and RTGS and only available during banking hours, however, this facility is free of charge (which made online), unlike IMPS, which is charged by most banks.
6. It is a secure medium of transfer of funds as bank servers are secured through firewalls and different level of identification security like passwords and OTP. However, an error in entering the bank account number or mobile number by the sender could cause a different account to be wrongfully credited.
7. The sender and receiver will be notified of the IMPS transfer, especially if the amount is large.
IMPS charges vary from bank to bank. Here are the charges on IMPS services for 3 popular Indian banks:
SBI: All NEFT, RTGS and IMPS charges will be free of charges for SBI customers starting 1 August 2019.
ICICI Bank: According to the bank's website, transactions valued up to Rs 10,000 will be charged Rs 3.5 plus GST. Above Rs 10,000 to Rs 1 lakh, the transfer will cost Rs 5 (plus GST) and transactions above Rs 1 lakh up to Rs 2 lakh will be charged Rs 15 (plus GST).
HDFC Bank: Transactions above Rs 1 to Rs 1 lakh are charged Rs 5 and those above Rs 1 lakh up to Rs 2 lakh are charged Rs 15 per transaction. HDFC IMPS charges are additionally liable to GST.