Transferring funds instantly and around the clock was a significant challenge for the banking industry. Previously, users could only use
NEFT and
RTGS for fund transfers during banking hours. To address this, NPCI conducted a pilot study of a mobile payment system with banks such as SBI, BOI, UBI, and ICICI in August
2010. Later, Yes Bank, Axis Bank, and HDFC Bank joined the initiative in September, October, and November 2010, respectively. The Immediate Payment Service (IMPS) was officially launched to the public on November 22, 2010, by Smt.
Shyamala Gopinath, DG RBI, in Mumbai. This article will explore the details and functionalities of IMPS, including charges, limits, timings, eligibility, and more.
IMPS Full Form and Meaning
IMPS, or Immediate Payment Service, is an electronic funds transfer system in India that allows individuals to send and receive money instantly through mobile phones or Internet banking. It supports real-time transactions, making it
easy and secure to transfer funds. With IMPS, users can make payments, settle bills, send money to friends and family, and handle various financial transactions quickly and efficiently.
How does IMPS Work?
Now that you have a basic understanding of IMPS transfers, let's see how it works. From a technical standpoint, here’s how the process is structured:
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The Infrastructure
The National Payments Corporation of India (NPCI) manages the country's IMPS transactions. They ensure the system runs smoothly by maintaining a solid infrastructure that includes:
- IMPS Switch: This is a secure and reliable channel connecting all banks. It enables fast transfers of funds and related data between banks.
- Message Broker: This system routes information among different participants in the IMPS network, ensuring smooth communication.
- Directory Services: This database records all participating banks' technical details, serving as the system's central reference.
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The FIBOS Communication Protocol
FIBOS is the standardised messaging format used by banks to communicate securely with the NPCI. FIBOS messages include details about the sender, recipient, transaction amount, and security information. By following the FIBOS
standard, banks can ensure smooth, safe transactions and build trust within the banking industry. This standardised protocol also improves the accuracy and reliability of transactions.
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The Transfer Process
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Initiation: The transfer begins when the sender starts the process through their bank's mobile app, online portal, or ATM. The bank's system then verifies the sender's identity using their MPIN or OTP.
Once confirmed, the bank creates an IMPS message containing the transaction details in a standardised format (FIBOS).
- Message Transmission: The IMPS Switch securely sends the transfer details to the National Payments Corporation of India (NPCI), ensuring a safe and efficient transfer.
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Routing and Validation: NPCI locates the recipient's bank using its directory and forwards the transaction information. It then checks the recipient's account details, message format, and available funds
to ensure the transfer can proceed smoothly.
- Authorisation: Once NPCI confirms that everything is in order, it authorises the transfer by sending a message to the recipient's bank.
- Funds Debit: The sender's bank deducts the transfer amount from their account and updates its records to reflect the transaction.
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Clearing and Settlement: NPCI manages the clearing and settlement process to ensure smooth fund transfer between banks. This includes debiting the sender’s account through RBI and crediting the
recipient’s bank, ensuring the funds are transferred securely and records are updated.
- Crediting Beneficiary: The recipient's bank receives the funds from NPCI and deposits the money into the beneficiary's account.
- Confirmation: Both the sender and recipient receive notifications confirming the successful completion of the transfer.
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Security
The IMPS network uses several methods to protect your information.
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Encryption: To keep your data safe, the IMPS network uses strong encryption methods like SSL or TLS. This means your information is scrambled while it's being sent, making it hard for others to read.
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Two-Factor Authentication: An extra layer of security is added with Two-Factor Authentication. This requires you to use two different ways to prove your identity, like a password and a code sent to your
phone.
- Message Authentication: IMPS uses digital signatures to verify that messages haven't been changed. This helps protect against tampering.
Benefits of IMPS
IMPS offers several advantages for making quick money transfers:
- Round-the-clock availability: You can send and receive money anytime, even on holidays.
- Instant transfers: Funds are credited to the recipient's account immediately.
- Cost-effective: IMPS transactions are generally low-cost.
- Wide accessibility: Available through mobile banking, online banking, and ATMs.
- Security: IMPS uses strong security measures to protect your transactions.
IMPS Eligibility
According to NPCI, both the sender and receiver must have bank accounts with registered mobile numbers and MMIDs to send or receive funds through IMPS. Additionally, entering the IFSC code, bank account number, and transaction amount is
required to complete a transaction.
IMPS Limit Per Day
According to the latest update from government bodies, the current daily IMPS limit is set at Rs. 5 lakhs per day. Initially, the Reserve Bank of India capped the daily IMPS limit at Rs. 2 lakhs. However, considering the growing demand
for this payment system, the RBI has raised the daily limit.
IMPS Charges as of 2024
The charges for IMPS transactions are as follows:
- ₹2.5 plus GST for transactions up to ₹10,000
- ₹5 plus GST for transactions between ₹10,001 and ₹1 lakh
- ₹15 plus GST for transactions between ₹1 lakh and ₹2 lakh
- ₹20 plus GST for transactions above ₹2 lakh
IMPS Transfer Time
IMPS operates 24/7 for all account holders of any bank, enabling instant fund transfers to the beneficiary upon approval by the sender's bank. In rare cases where a transaction is voided, fails, or times out, the resolution may take up
to 5 working days.
How to Register for IMPS
To sign up for IMPS, follow these steps:
- Use your bank's mobile banking service to register.
- Make sure you have your bank's Mobile Money Identifier (MMID) and your mobile banking personal identification number (MPIN). The person you're sending money to will also need these.
- If your bank offers SMS IMPS, download their mobile banking app or use SMS to register.
How to Transfer Money through IMPS?
To transfer money from your bank account to another using IMPS, follow these steps:
- Log in to your mobile banking app or Internet banking account.
- Find the "Fund Transfer" option and select it.
- Choose IMPS as the transfer method.
- Enter the recipient's MMID (Mobile Money Identifier) and your MPIN (Mobile Personal Identification Number).
- Type in the amount you want to send.
- Review the details and confirm the transfer.
- Enter the OTP and follow the instructions to finalise the transfer.
IMPS vs NEFT vs RTGS
| Particulars |
IMPS |
NEFT |
RTGS |
| Minimum transaction amount |
₹1 |
₹1 |
₹2 lakh |
| Maximum transaction amount |
Transaction limits vary from bank to bank |
Transaction limits vary from bank to bank |
No upper limit |
| Availability |
24x7, including weekends and holidays |
Typically, available during banking hours (varies by bank) |
Typically, available during banking hours (varies by bank) |
| Settlement Time |
Immediate |
Batches (usually hourly) |
Real-time |
Closing Thoughts
IMPS has revolutionised the way we send and receive money in India. With its instant transfer capabilities, low costs, and wide accessibility, it has become an essential tool for individuals and businesses alike. Whether you need to
send money to a loved one in need, settle urgent bills, or make a quick payment, IMPS is the most convenient and efficient option available. Its round-the-clock service ensures that financial transactions can be completed at any time,
providing peace of mind and flexibility.
Frequently Asked Questions (FAQs)
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Who started the IMPS service?
The IMPS (Immediate Payment Service) was started by the National Payments Corporation of India (NPCI).
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What is the difference between IMPS and NEFT?
IMPS provides instant fund transfers 24/7, whereas NEFT (National Electronic Funds Transfer) processes transactions in hourly batches and operates only during specific banking hours.
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How to check the IMPS reference number?
You can check your IMPS reference number in the transaction details or confirmation message sent by your bank, typically available in your online banking portal or mobile banking app.
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How long does an IMPS transfer take?
An IMPS transfer is processed instantly, typically within a few seconds.
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Are IMPS transfers free?
No, IMPS transfers usually involve charges. However, some banks like SBI offer free IMPS transfers for certain amounts. The exact charges depend on the bank and the transfer amount.
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What information do I need for an IMPS transfer?
To send money via IMPS, you'll need the recipient's mobile number and MMID (Mobile Money Identifier). Alternatively, you can use their bank account number and IFSC code.
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Can I use IMPS for international transfers?
No, IMPS is only for domestic money transfers within India. For international transfers, consider using services like PayPal or wire transfers.
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Can I cancel an IMPS transaction?
Once an IMPS transaction is complete, it cannot be cancelled as the money is transferred instantly.
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How can I track an IMPS transaction?
You can track your IMPS transaction using the 12-digit Transaction ID or Retrieval Reference Number (RRN) generated during the transfer. Check the status through your net banking or mobile banking account.
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Can I set up recurring payments with IMPS?
Yes, many banks allow you to set up recurring payments for bills or subscriptions using IMPS.
