National Payments Corporation launches inter-bank payments through mobile phones

National Payments Corporation of India (NPCI), a Reserve Bank of India backed non-profit company, yesterday launched a first-of-its-kind, 24-hour interbank mobile payment system (IMPS) that would allow bank customers in the country to remit money to any other bank account in India for free with their mobile phones.

At present there are seven banks - State Bank of India, ICICI Bank Ltd, Union Bank of India, Bank of India, HDFC Bank Ltd, Axis Bank Ltd and Yes Bank Ltd - that offer the service.

Corporation Bank, Citibank, Standard Chartered Bank and Canara Bank are among seven others that are in the process of implementing it, according to A P Hota, managing director and chief executive officer of NPCI.

The NPCI system would be the first such service in the world to allow users to conduct transactions that are routed in tandem through the bank and mobile services provider.

The transactions would be capped at Rs50,000 per day in accordance with RBI guidelines. Users would need to register themselves for mobile banking with their banks, while the sender and receiver would get a special Money Money ID (MMID) from the bank besides sharing their mobile numbers with the bank.

Hota said SBI had already registered 8.5 lakh cutomers uunder this service while ICICI registered 4 lakh people.

The system is said to be as secure as the net-banking facility and offers the advantage of effecting funds transfer without the use of PCs or internet enabled phones. 

Till now, the transfer of funds through mobile phones was only allowed between users who held accounts with the same bank According to Hota , "It is India's first instant, real-time, 24x7 fund transfer facility in the retail payment sector".