Would you like to save on mobile banking transaction charges? Then, you need to know that only four banks out of 59 banks charge customers for using the interbank mobile payment system and even NPCI charges just 25 paise per IMPS transaction from the remitter bank
State Bank of India (SBI), Axis Bank, ICICI Bank and UCO Bank are the only four banks among 59 banks offering mobile payment facilities that charge for the service. These banks charge customers anywhere between Rs5 to Rs25 each time they use the interbank mobile payment system or immediate payment service (IMPS) transaction. The other 54 banks offering IMPS facility do the interbank money transfer free of charge. The banks are within their right to charge for the services, since the Reserve Bank of India (RBI) had left the decision on charges to the banks (Wake Up to Your Bank Charges). An email from an angry reader prompted us to investigate the matter for the benefit of readers. We find that the National Payments Corporation of India (NPCI), which introduced and manages IMPS transactions between banks, charges 25 paise per transaction from the remitter bank only. (http://www.npci.org.in/documents/IMPS_FAQsBankers.pdf )
The IMPS is a technologically advanced system that is very easy to use, cost efficient and time saving service which eliminates issues regarding money transfer. It is cheaper than the cheque clearing system.
So far, as many as 59 banks provide IMPS. Axis Bank’s IMPS outward funds transfer charges are Rs5 per transaction up to transaction of Rs1 lakh, Rs15 per transaction for amounts between Rs1 lakh to Rs2 lakh and Rs25 per transaction for amounts above Rs2 lakh. SBI charges Rs5 per transaction for remitting money through IMPS through its portal and UCO bank is also charging Rs5 per IMPS transaction.
A Moneylife reader pointed out to us that ICICI Bank’s outward IMPS charges are Rs5 per transaction. Yet, this is a better option than the time-consuming cheque clearing system. However, the reader, an account holder of ICICI Bank, said she would prefer to write a cheque instead of using the IMPS facility.
“It is penny wise but pound foolish, either customer spends Rs5 for transferring money through IMPS or customer does not spend anything by using a cheque. This is because banks provide certain cheque leaves every quarter free of cost. So why spend money for using IMPS?” she said.
It is interesting to know that Axis Bank, ICICI Bank, State Bank of India and UCO Bank which charges for IMPS services are part of the IMPS Steering Committee at NPCI.
NPCI, in collaboration with member banks had introduced IMPS that allow customers to make 24x7 instant interbank payments to individuals, or merchants via mobile phone, Internet or ATM. At the time of its launch in November 2010, a senior official of NPCI told Moneylife that IMPS would be offered free of cost and from March 2011 onwards it would start charging 25 paise per transaction. (NPCI opens floodgates for mobile payments in India )
IMPS is restricted to interbank transactions, but can be used by anyone and from anywhere to make payments. One could pay the grocery bill to the shop owner through the mobile phone, provided both parties are registered IMPS users with their respective banks. Similarly, one could pay the fare to a taxi driver directly through IMPS.
The RBI policy of forbearance (allowing bankers to decide charges themselves) with regard to service charges leads to the frequent hikes in banking service charges. Banks are charging money for almost every small transaction or service they offer. In the recent past, Moneylife has written about various charges levied on the customers by the banks.
RBI earlier said that technology has failed to reduce banking transaction costs. Technology must enable customer facilitation in terms of cost, time and convenience and it should be dovetailed to customer needs and expectations.
You may also like to read:
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Banking Service Charges: Our online survey results
NPCI opens floodgates for mobile payments in India
Things you wanted to know about internet mobile banking but did not know whom to ask
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One more issue I would like to share with the viewers. It happened a month ago. I went to deposit some cash in my account in a different branch of the same city and same locality. I deposited the cash through green channel in NCERT campus branch of SBI, whereas my account is in New Campus JNU branch of SBI. both the branches are in the same city and are located within 3KM. However, when I checked my account the deposited amount was 50/- lesser with a caption reading "Inter City Charges" displaying infront of the deduced amount. I was simply amazed with the fact that I have been depositing my checks in the same NCERT branch and had never been charged, then why they considered depositing of cash as inter city deposit?
RTGS/NEFT payment system requires an infrastructure which cost 1cr to 3cr and hence bank charging customer small fee per transaction can be justitied,.but i dont think IMPS requires any such infrastructure.