The interbank mobile payment service (IMPS) is an instant real-time interbank electronic funds transfer service through mobile phones. The service is available 24/7, 365 days a year.
National Electronic Funds Transfer (NEFT) is a nationwide payment system facilitating one-to-one funds transfer. The Reserve Bank of India (RBI) manages this system, and the NEFT system is used for customer-initiated fund transfers from one bank account to another. The sender initiates the transaction through the bank's internet website or mobile application. The Reserve Bank of India (RBI) introduced the RTGS system in 2004, and the RTGS system is a real-time gross settlement system (RTGS) for interbank transactions.
Did You Know? IMPS, NEFT and RTGS are all electronic payment systems that allow for the transfer of funds between banks.
Definition of IMPS, NEFT and RTGS
IMPS and NEFT are available 24x7, while RTGS operates only during banking hours. IMPS has the fastest transaction process among NEFT, RTGS and IMPS. IMPS is a secure, efficient, and cost-effective way to transfer funds instantly. The NEFT system is managed by the Reserve Bank of India (RBI) and uses the services of many banks in the country. Lastly, the RTGS system is used for transactions between banks, financial institutions, and inter-bank settlements.
Importance of IMPS, NEFT, RTGS
Online fund transfers have been reliable, fast, and convenient. Using these services, you can transfer funds easily without having to wait in long queues to withdraw cash or try to be physically present at the bank.
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IMPS
IMPS stands for Immediate Payment System and is a real-time interbank electronic funds transfer system in India. It is a 24/7/365 service that allows customers to make instant interbank fund transfers. The system is designed to facilitate speedy and convenient banking transactions between banks and financial institutions in India.
The service is available through all major banks in India and can be accessed through mobile phones, internet banking, ATMs, and Point-of-Sale (PoS) terminals.
The main advantage of IMPS is that it allows customers to send and receive money instantly.
This is a great convenience for customers who need to send money quickly. Additionally, IMPS is available 24/7, so customers can use it anytime, anywhere. Another advantage of IMPS is that it can be used to pay for goods and services without needing a bank account. This makes it a great option for people who do not have a bank account or do not want to use their bank account to pay for goods and services.
NEFT
The National Electronics Funds Transfer (NEFT) system is a nationwide payment system facilitating one-to-one funds transfer. Under this Scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country participating in the Scheme.. RBI acts as the clearing house for all NEFT transactions.
The main advantages of the NEFT system are:
- It is a simple and convenient way to transfer funds between banks. It is a safe and secure system using the Reserve Bank of India's (RBI) messaging system for transmitting messages.
- NEFT is a fast system, as transactions are processed and settled in real time.
- It is a cost-effective system as there are no transaction charges for using the NEFT system.
Also Read: All About UPI– United Payments Interface
RTGS
The Real Time Gross Settlement (RTGS) is a system for instantaneous money transfers between banks. The RTGS system is used for high-value transactions and is therefore considered a very secure way of transferring money. The Reserve Bank of India (RBI) uses the system, and the banks are connected to the RBI through a secure network.
The main advantages of RTGS are as follows:
Faster Settlements
RTGS transactions are settled in real-time, which means that the beneficiary bank gets the funds immediately. This contrasts with other interbank settlement systems, where settlements are made on a batch basis.
Reduced Risks
RTGS transactions are processed in real time, reducing the settlement risks associated with other interbank settlement systems. Improved efficiency: The RTGS system handles high-value transactions, which results in improved efficiency and reduced transaction costs. Enhanced security: The RTGS system is highly secure and is backed by a well-defined legal framework.
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Difference between IMPS & NEFT RTGS
There are three primary types of electronic funds transfer (EFT) in India: The Immediate Payment Service (IMPS), the National Electronic Funds Transfer (NEFT), and the Real Time Gross Settlement (RTGS) system. IMPS is the newest system, launched in 2010, while NEFT and RTGS have been operational since 2005 and 2004, respectively.
|
IMPS |
NEFT/ RTGS |
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IMPS transactions have a lower limit of ₹2 lakh |
NEFT and RTGS have a higher limit of ₹10 lakh. |
|
In terms of safety, all three systems are equally safe. |
Each system is safe |
|
IMPS transactions can be made 24 hours a day, 7 days a week |
NEFT, and RTGS operate half hourly batches from 8 am to 7 pm on all days except 2nd & 4th Saturday and Sunday & holidays. |
All transfers are made through the Reserve Bank of India's (RBI) secure network, and customers must authenticate their transfers with a personal identification number (PIN). Overall, the IMPS system is the most convenient and fastest way to transfer funds in India. However, for larger transactions, NEFT and RTGS may be more appropriate.
Things to Consider Before Initiating a Fund Transfer
There are a few important things to consider before initiating a fund transfer:
1. Make sure you have the correct account information for the recipient. This includes the account number and routing number.
2. Consider the timing of the transfer. Some banks may take a few days to process the transfer, so you will want to ensure the funds will be available when you need them.
3. Check the fees associated with the transfer. Some banks may charge a fee for outgoing transfers, so you will want to factor that into your decision.
4. Make sure you have enough funds available in your account to cover the transfer. You do not want to be caught with an overdraft fee!
5. Review the terms and conditions of the transfer. Some banks may restrict how often you can transfer funds, so read the fine print.
Considering these factors will help ensure a smooth and successful fund transfer.
Conclusion
Immediate Payment Service (IMPS) is an interbank electronic instant mobile money transfer service through mobile phones. National Electronic Funds Transfer (NEFT) is a nationwide system that facilitates the interbank transfer of funds. The Reserve Bank of India (RBI) operates this system. Real Time Gross Settlement (RTGS) is an electronic funds transfer system that facilitates the transfer of funds from one bank to another in real time. All three systems are safe and secure and allow for the transfer of funds between banks quickly and efficiently.
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