Going forward, all you need is a mobile number and the bank name of the receiver to transfer money online, said the National Payments Corporation of India (NPCI). Soon, you can transfer up to Rs 5 lakh from one bank account to another without adding a beneficiary. The NPCI had requested all members to comply with its order for initiating and accepting fund transfers through mobile numbers and bank names on all IMPS channels by January 31, 2024, as per the circular. As the last date is here, banks are expected to allow this fund transfer facility from February 1, unless there is an extension. How will it work? What do you need to keep in mind while transferring your money? ET Wealth Online explains.
IMPS bank transfer can be done with bank name and mobile number: New rule explained
At present, there are two types of payments allowed under IMPS — a) person-to-account payment — where you have to use the bank account number, bank name, and IFSC code of the bank to transfer money; b) person-to-person payment — where you have to use the mobile number and a mobile money identifier (MMID) to identify a beneficiary while sending money from one bank account to another. MMID is a unique seven-digit number issued by banks to their customers for access to mobile banking services. In a circular dated October 21, 2023 NPCI said, “With the migration of IMPS from ISO to XML, we have envisaged a convenient customer journey which shall be carried out using mobile number and bank name.”
“Mobile number + Bank Name based transactions shall be carried out on existing person-to-person payment railroad using mobile number + default MMID combination,” it said.
As you can see the new simplified IMPS is nothing but a more streamlined version of IMPS person-to-person payments using mobile numbers and MMIDs. How will it work? While sending money, the sender will now enter or select the receiver’s mobile number and bank name from the list of the banks enabled on the flow, instead of entering the unique MMID, said Sanjeev Moghe, President and head — Of cards and Payments, at Axis Bank. Banks will give the option to add a successfully validated mobile number and bank name combination as payee/beneficiary on mobile banking and Internet banking channels, NPCI said.
Keep in mind that banks will provide a beneficiary validation facility to customers before initiating a financial transaction. NPCI also directed the remitter banks to maintain a mapping of member bank names with default MMID and undertake necessary UI/UX enhancements to facilitate beneficiary validation and financial transactions using mobile numbers and bank names. The beneficiary bank also needs to accept the bank name-based transaction request and process payments to the beneficiary account for the same.
What happens if two accounts are linked to one mobile number?
As the mobile number will be the main identifier in the new simplified IMPS option, where will the money go if two bank accounts are linked with the same mobile number? Clearing the air, NPCI said, “For multiple accounts linked against the mobile number, the beneficiary bank shall credit to the primary/default account. The primary/default account shall be identified using the customer’s consent. In case, the customer consent is not provided, the bank shall decline the transaction.”
New IMPS rule: How much money can you transfer through your mobile number and bank name?
NPCI earlier said that up to Rs 5 lakh can be transferred through simplified IMPS without adding a beneficiary. “The simplified IMPS fund transfer journey can be extended to retail as well as corporate for bulk transaction use cases,” NPCI mentioned in a release. Now the upper limit will vary from one bank to another, depending on their policies.
New IMPS money transfer rule: How it will reduce wrong bank account transfer
“This payment experience will be accompanied by real-time beneficiary name validation,” said NPCI in a release.
At present, before sending the money, when you enter the details, there is no way to check in real-time whether the details belong to the intended sender or not. However, the new addition of a simplified IMPS real-time beneficiary validation feature will help the remitter cross-check the name in the bank’s record and ensure that payment is made to the intended beneficiary only. As the new simplified IMPS now supports beneficiary name validation in the XML platform, the sender will be able to see the beneficiary’s name before authorising a transaction, explained Moghe. It will reduce the scope of incorrect or wrong bank account transfers, said experts.
