Here are details of new IMPS money transfer rule: How will it work?

Users will soon be able to transfer money up to Rs 5 lakh through IMPS by deploying the mobile number and bank account name of the receiver

Due to the convenience offered by online money transactions, users can easily transfer money from one bank to another. There are several ways in which one can transfer money online, including the National Electronic Fund Transfer (NEFT), Real Time Gross Settlement (RTGS), and Immediate Payment Services (IMPS), among others. One of the most used methods of money transfer is IMPS.

Users will soon be able to transfer up to Rs 5 lakh through IMPS by deploying the receiver's mobile number and bank account name. The National Payments Corporation of India (NPCI) has untangled IMPS to make bank account transfers easier and error-free. According to the NPCI, users can just use the mobile number and bank account name of the receiver or beneficiary to send money.

Here is a detailed look at the new simplified IMPS:

What is IMPS?

IMPS is a payment system that provides a 24x7 instant domestic funds transfer facility. India was the fourth country after South Korea, South Africa and the United Kingdom to introduce it. This system facilitates a real-time funds transfer between the remitter and beneficiary with a deferred net settlement between banks.

Users can transfer money via IMPS through various channels like internet banking, mobile banking apps, bank branches, ATMs, SMS and Interactive Voice Response System, i.e. IVRS.

Which changes have been proposed by NPCI?

The NPCI had recently said that users will now be able to transact by entering just the beneficiary's mobile number and bank name on banking channels like mobile banking, internet banking, etc. This payment experience will be accompanied by real-time beneficiary name validation.

How to transfer money through IMPS?

- Open the mobile banking app

- Click on 'Fund Transfer' on the main page

- Pick 'IMPS' as the method to transfer funds

- Pay using a mobile number and select the beneficiary bank name, no need for an account number/IFSC.

 -Enter the amount you want to transfer up to Rs 5 lakh without adding the beneficiary

- After feeding in details, click on 'Confirm' to proceed

- Complete the transaction after receiving the OTP

How much can you send through the new simplified IMPS?

Up to Rs 5 lakh can be transferred through simplified IMPS without adding a beneficiary, the NPCI had said. The "simplified IMPS fund transfer journey" can be extended to retail as well as corporate for bulk transaction use cases, it had added.

When will the new simplified IMPS be operational?

Banks are yet to offer this new feature to their customers as they are in various stages of going live.

How will real-time beneficiary validation work

Currently, there is no way to confirm in real-time whether the details belong to the intended sender or not before sending the money. Through the simplified IMPS real-time beneficiary validation feature, the remitter will be able to cross-check the name in the bank's record and ensure that payment is made to the intended beneficiary only. The sender will be able to see the beneficiary's name before authorising a transaction with the addition of the validation feature.