Business Standard

Soon, transfer money without Net

IMPS transactio­n limit raised to ~5 lakh a day, from ~2 lakh

- SUBRATA PANDA Mumbai, 8 October

The Reserve Bank of India (RBI) on Friday announced that it will soon introduce a new framework for retail digital payments in offline mode across the country. This will further the reach and adoption of digital payments in areas with low internet connectivi­ty. The RBI also raised the daily transactio­n limit for immediate payment service (IMPS), from ~2 lakh to ~5 lakh.

It had announced its intention of doing pilot tests on transfers without internet in the developmen­tal and regulatory statement dated August 6, 2020. After that, three pilots were successful­ly conducted under the scheme in different parts of the country during September 2020-June 2021. It involved small-value transactio­ns covering a volume of 241,000 for a value of ~1.16 crore.

The step on IMPS, market participan­ts say, will further boost the already burgeoning digital payments ecosystem in the country.

“In view of the importance of the IMPS system and for enhanced consumer convenienc­e, it is proposed to increase the per transactio­n limit from ~2 lakh to ~5 lakh,” RBI Governor Shaktikant­a Das said in his statement.

The payments industry is jubilant over the RBI’S decision to raise the per transactio­n limit for IMPS transactio­ns. It is of the opinion that it will, particular­ly, open new opportunit­ies in the B2B payments space.

“This will lead to further increase in digital payments and provide an additional facility to customers for making digital payments beyond ~2 lakh,” the RBI said.

“With RTGS now operationa­l round the clock, there has been a correspond­ing increase in settlement cycles of IMPS, thereby reducing the credit and settlement risks,” the RBI further said.

IMPS is a payment platform that offers instant domestic funds transfer facility 24x7 through various channels such as internet banking, mobile banking apps, bank branches, ATMS, SMSES, and IVRS (interactiv­e voice response).

The IMPS facility is provided by the National Payments Corporatio­n of India (NPCI), the umbrella entity for digital payments in the country, through its existing national financial switch (NFS).

In this calendar year so far, IMPS has processed more than 3 billion transactio­ns worth around ~30 trillion.

“It is a fantastic move by the RBI. Now, transactio­ns above ~2 lakh, which were moving to other platforms such as NEFT and RTGS, will take place on the IMPS platform. It will not only be beneficial for the B2B payments but also for other payments,” said Vishwas Patel, chairman, Payments Council of India.

According to Sandeep Srinivasa, co-founder, Redcarpet, the increase in the limit for IMPS transactio­ns was long overdue.

He added, “But, essentiall­y, what we are seeing is a gradual sanitisati­on of limits by the RBI for various payment platforms. The regulator is realising that even for intra remittance­s, a larger limit will hugely benefit the users. Not only B2B payments space but P2P (peer to peer) payments will also benefit from this. And, to some extent, RBI’S NEFT and RTGS may get impacted.”

Back in April, the RBI permitted full-kyc prepaid payments instrument­s (PPIS) to hold double the outstandin­g balance they can currently hold — from ~1 lakh to ~2 lakh. It had also doubled the maximum balance a customer can hold at the end of the day in a payments bank to ~2 lakh.

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