RBI Raises IMPS Transaction Limit To Rs 5 Lakh Per Transfer | Know All About It

The per-transaction two limit in IMPS, effective from January 2014, is currently capped at Rs 2 lakh for channels other than SMS and IVRS.

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New Delhi: With a motive to promote digital transactions, the Reserve Bank of India on Friday raised the per transaction limit from Rs 2 lakh to Rs 5 lakh through Immediate Payment Service (IMPS). The central bank increased the daily limit of IMPS transactions to Rs 5 lakh from earlier Rs 2 lakh earlier to offer ease to consumers.

While sharing the details of the MP review, the RBI governor said it will lead to a further increase in digital payments and will provide an additional facility to customers for making digital payments beyond Rs 2 lakh, he said, adding, necessary instructions in this regard would be issued separately.

The Reserve Bank also proposed to introduce a framework for retail digital payments in offline mode across the country.

The Statement on Developmental and Regulatory Policies dated August 6, 2020, had announced a scheme to conduct pilot tests of innovative technology that enables retail digital payments even in situations where internet connectivity is low or not available (offline mode).

With a view to providing further impetus to the fintech ecosystem, he said, the fourth cohort on Prevention and Mitigation of financial frauds' is being announced.

Here’s what it means for consumers

IMPS is a real-time payment service for inter-bank transfers and is processed at all times including weekends and public holidays. The instant domestic funds transfer facility is accessible through various channels like internet banking, mobile banking apps, bank branches, ATMs, SMS, and IVRS.

The per-transaction two limit in IMPS, effective from January 2014, is currently capped at Rs 2 lakh for channels other than SMS and IVRS. The per-transaction limit for SMS and IVRS channels is Rs 5000.

"In view of the importance of the IMPS system in the processing of domestic payment transactions, it is proposed to increase the per-transaction limit from Rs2 lakh to Rs5 lakh for channels other than SMS and IVRS. This will lead to a further increase in digital payments and will provide an additional facility to customers for making digital payments beyond ₹2 lakh," the RBI said in a statement. 

One of the most preferred routes for retail customers than the other two systems which comes with certain limitations.  For example, NEFT allows transfers of funds in batches and RTGS does not allow payments below Rs 2 lakh.