For first time in 12 months, IMPS transactions fall; experts blame decline in currency supply

By: |
Mumbai | Published: December 23, 2016 6:15:57 AM

Transactions made through the Immediate Payment Service (IMPS) of the National Payments Corporation of India (NPCI) witnessed a month-on-month decline both in the volume and value terms in November, the first time in more than a year.

cyberThe IMPS has been gaining popularity over the last couple of years, and is increasingly being preferred by customers over the NEFT to make smaller-value transactions. (Source: Reuters)

Transactions made through the Immediate Payment Service (IMPS) of the National Payments Corporation of India (NPCI) witnessed a month-on-month decline both in the volume and value terms in November, the first time in more than a year.

Unlike the National Electronic Funds Transfer (NEFT), the IMPS allows the customer to instantly transfer funds from one bank account to another, instead of waiting for the transaction to being settled in a scheduled time slot.

The number of IMPS transactions made in November, at 3.62 crore, was 60 lakh less compared with October, while the value of these transactions fell by over 5% over the period to R32,480 crore.

The IMPS has been gaining popularity over the last couple of years, and is increasingly being preferred by customers over the NEFT to make smaller-value transactions.

With the advent of the Unified Payment Interface (UPI), which will be based on the IMPS platform, the service is on track to become the most widely used mode of inter-bank funds transfer in the country.

Moreover, unlike the NEFT and and Real-Time Gross Settlement (RTGS), which operate between 9 am and 4.30 pm (6.30 pm for transactions within the same bank), the IMPS platform is available round the clock. Further, unlike the NEFT and RTGS, the IMPS is not confined to only bank accounts and is used by e-wallets and payment platforms as well.

However, after the government’s decision to withdraw old R500 and R1,000 notes, the growth momentum that IMPS had been enjoying for over a year came to a halt.

Experts attribute this trend to a fall in consumption, resulting from a decline in currency supply.

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