The decision will lead to increase in digital payments and will provide an additional facility to customers for making digital payments beyond ₹2 lakh, RBI said in its statement
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While announcing the monetary policy, RBI governor Shaktikanta Das said that the central bank has increased the per transaction limit in Immediate Payment Service (IMPS) from ₹2 lakh to ₹5 lakh for channels other than SMS and IVRS (interactive voice response system).
“The decision will lead to increase in digital payments and will provide an additional facility to customers for making digital payments beyond ₹2 lakh," RBI said in its statement on development and regulatory policies issued on 8 October.
IMPS of National Payments Corporation of India is a vital payment system that provides 24x7 instant domestic funds transfer facility. It is also accessible through various channels like internet banking, mobile banking apps, bank branches, ATMs, SMS and IVRS.
IMPS has been consistently gaining traction as a payment service due to the ease with which it allows transactions.
According to RBI’s annual report, “In 2021, the number of IMPS transactions crossed ₹32 trillion to overtake NEFT transactions and were worth over ₹29 trillion."
Why was the limit increased?
The IMPS settlements are processed through member banks’ RTGS.
Adhil Shetty, chief executive, BankBazaar.com, said, “The Real-Time Gross Settlement (RTGS) at banks are processed continuously throughout RTGS business hours, which has now been increased to round the clock. Consequently, the settlement time for IMPS has also come down. As the settlement cycles have gone up, the RBI has raised the maximum amount that can be transferred via all channels like internet banking, mobile banking apps, bank branches, ATMs, etc., to ₹5 lakh against the earlier limit of ₹2 lakh."
“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," said the RBI statement.
What does it mean for you?
Increasing the amount that can be transferred via IMPS will provide customers with an additional facility to make digital payments beyond ₹ 2 lakh.
Shetty further said, “The announcements—today’s as well as previous ones—seen from a 30,000 feet view have implications for the transfer of money not just within India’s borders but also outside too. This is especially significant as the idea of digital currencies takes hold globally, and the regulator is making sure that digital transfers of rupees are increasingly safer, accessible, compliant and traceable. Therefore, customers are going to be able to move large amounts around the clock, safely, instantly, whether domestically or abroad."
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