In a shocking incident, UCO Bank revealed that due to technical issues in IMPS (immediate payment service), certain transactions initiated by other bank account-holders resulted in credit to its account-holders without actual receipt of money from these banks. UCO Bank says it blocked recipients' accounts and has been able to retain and recover Rs649 crore out of Rs820 crore, which is about 79% of the amount. Later, UCO Bank clarified that there was no issue with the IMPS platform.
In a regulatory filing, UCO Bank says it has initiated requisite actions to recover the balance of Rs171 crore and the matter has also been reported to law enforcement agencies for necessary action.
According to the lender, between 10th November and 13 November 2023, it observed money being credited into its account holders through certain transactions initiated by other bank account holders using IMPS. "The Bank, as a precautionary measure, has made the IMPS channel offline and is working closely with the stakeholders to resolve the issue and restore the IMPS services at the earliest."
IMPS of National Payments Corporation of India (NPCI) is a critical payment system providing a 24x7 instant domestic funds transfer facility and is accessible through various channels like internet banking, mobile banking apps, bank branches, automated teller machines (ATMs), SMS and intelligent voice response service (IVRS).
According to NPCI, on 14 November 2023, it recorded 13.58mn (million) transactions with a value of Rs13,393.31 crore. It takes the November transactions to 239.04mn with a value of Rs2.72 lakh crore.
In October 2021, to promote digital transactions, Reserve Bank of India (RBI) enhanced the transaction limit using IMPS of banks to Rs5 lakh from Rs2 lakh.
Last month, NPCI announced the introduction of a simplified version of IMPS, offering a more user-friendly experience for transactions. Users can now perform transactions by inputting the recipient's mobile number and bank name, with real-time beneficiary name validation, says a report from Times of India
According to the report, the new simplified IMPS simplifies person-to-person payments using mobile numbers and mobile money identifiers (MMIDs) and instead of requiring the unique MMID, the sender can enter or select the recipient's mobile number and bank name from the list of enabled banks.
The simplified IMPS also includes a real-time beneficiary name validation feature, which will allow senders to cross-verify the name against the bank's records before authorising the transaction, making sure that payments go to the correct recipient.
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