IMPS new money transfer rules: Soon, send up to Rs 5 lakh with mobile no. & bank name; add beneficiary, IFSC, account not needed

New IMPS money transfer rule: In a move to simplify and streamline bank account transfers, the National Payments Corporation of India (NPCI) is set to facilitate hassle-free fund transfers of up to Rs 5 lakh without the need to add a beneficiary, states an ET report. The revised Immediate Payment Service (IMPS) will soon allow users to make secure and efficient bank transfers using just the recipient’s mobile number and bank account name.
This change in the IMPS system aims to enhance the ease and accuracy of financial transactions. To understand how this revamped IMPS will operate and what happens when you hold multiple accounts within the same bank, here is a comprehensive breakdown of the updated process, as detailed in the ET report.
How IMPS Operates for Bank Account Fund Transfers:
IMPS offers two categories of payments:
a) Person-to-Account Payment: In this case, you are required to input the recipient’s bank account number, bank name, and IFSC code for the money transfer.
b) Person-to-Person Payment: To initiate a transfer from one bank account to another, you will need the recipient’s mobile number and a mobile money identifier (MMID). The MMID is a unique seven-digit number provided by banks to their customers, enabling access to mobile banking services. Each mobile banking account is assigned a distinct MMID by the respective bank.
For person-to-person payments using IMPS and MMID, both the sender and the receiver must possess valid MMIDs for their respective bank accounts. Additionally, you must be aware of the recipient’s MMID to successfully execute the IMPS transaction. According to Sumoth C, Vice President & Head – Digital at Federal Bank, the person-to-person payment method is less popular due to the requirement of knowing the recipient’s MMID before initiating the transaction. While banks follow a standardized format for MMID, many customers are unaware of their MMIDs, resulting in a preference for person-to-account payments over person-to-person payments, he says.
New simplified IMPS: What has NPCI proposed?
NPCI has 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.
The new simplified IMPS simplifies person-to-person payments using mobile numbers and MMIDs. Instead of requiring the unique MMID, the sender now enters or selects the recipient’s mobile number and bank name from the list of enabled banks.

Simplified IMPS: How much can you send?
Under this simplified IMPS, transactions of up to Rs 5 lakh can be made without the need to add a beneficiary. According to NPCI, the simplified IMPS fund transfer journey can be extended to retail as well as corporate for bulk transaction use cases. However, individual banks may have varying upper limits based on their policies.
Banks typically offer two payment options within their apps or net banking: “Quick pay” for small-value ad-hoc payments with capped limits and “Transfer to the beneficiary” for high-value payments to verified beneficiaries. Beneficiary name validation is now implemented in both options to verify the recipient’s name before completing the payment.
The new simplified IMPS can be summarized as follows:

When can you use the new simplified IMPS?
The rollout of the new simplified IMPS feature by banks is still in progress, with various stages of implementation. Federal Bank is nearing readiness as a beneficiary bank, and the changes are expected to go live soon. However, additional time is needed for remitters to make the necessary adjustments.
IMPS real-time beneficiary validation: How will it work?
Currently, when sending money, there’s no real-time validation to confirm whether the provided details belong to the intended recipient. The new simplified IMPS includes a real-time beneficiary validation feature, allowing remitters to cross-verify the name against the bank’s records, ensuring payments go to the correct recipient. With beneficiary name validation now supported in the XML platform, senders can review the beneficiary’s name before authorizing a transaction.
This feature enhances security in the simplified process, especially since the mobile number is the sole parameter for identifying the beneficiary, says Sumoth C. Without this, even a minor error while entering the mobile number can lead to funds being credited to unintended recipients, he adds.
It’s important to note that while beneficiary name validation is introduced, the cooling period, typically 30 minutes, for beneficiary addition will still apply. When adding a new beneficiary, you will need to wait for a period before conducting the first transaction. Mandar Agashe, Founder & MD at Sarvatra Technologies, confirms that the cooling period will remain unchanged, but the option to crosscheck and confirm beneficiary details before fund transfer will be available.
What happens if two accounts are linked with one mobile number?
In the case where two bank accounts are linked to the same mobile number, with the mobile number serving as the primary identifier in the new simplified IMPS, the beneficiary bank will designate one of the accounts as the primary account for receiving funds, says Ajay Rajan, Country Head, Digital and Transaction Banking, at YES Bank.
Additionally, banks will provide account holders with the choice to select their primary or default account for receiving such funds. According to Rajan, there should also be a provision for the beneficiary to change their primary account to another one, allowing the funds to be credited to the newly selected primary account. This flexibility ensures that beneficiaries have control over the account where they receive their funds.
Sumoth C from Federal Bank explains that banks will initially implement this simplified process for customers with only one active account in a bank. Subsequently, they will introduce the option to set default accounts or another solution to accommodate customers with multiple active accounts in this streamlined process.
Simplified IMPS: How will it help the customers?
The new simplified IMPS is set to offer several advantages for customers, making fund transfers more straightforward and efficient. Sumoth C highlights the ease of using the mobile number as a primary identifier for payments, simplifying the process compared to other methods that require less familiar parameters like account numbers, IFSC, or MMID.
While UPI often relies on mobile numbers for payments, the IMPS simplified flow extends a similar feature to all bank accounts, not limited to UPI users. The maximum person-to-person fund transfer limit with UPI is Rs 1 lakh, while the IMPS simplified flow allows users to make mobile number-based payments of up to Rs 5 lakh.
Rahul Jain, CFO of NTT DATA Payment Services India, sees this innovative approach as empowering users with seamless, transparent, and convenient payment solutions, achieved in just two steps by entering the beneficiary’s mobile number and bank name. This streamlined process promises swift transaction processing, security, and user-friendly money transfer options.
The proposed fund transfer flow simplifies the information required for processing transactions, enhancing user convenience and reducing the risk of errors and fraud. Additionally, the requirement for beneficiary verification before initiating the payment adds an extra layer of security. This feature is expected to streamline and simplify the cross-border inward remittance process, which, in some cases, relies on the IMPS rails for domestic instant settlement, according to Rajan.