There has been a surge in the use of electronic fund transfers over the past few years with the e-commerce and m-commerce growing rapidly in the country. A centralized network allows all banks to be interconnected and the details of all the bank accounts are available through a central server. The centralization of the bank networks has allowed customers to transfer funds instantly, regardless of their geographical location. Using this centralized model banks have been creating new and innovative services for their customers. One of the most popular services introduced by banks has been the Instant Money Transfer (IMT) option. The Instant Money Transfer service provides customers with a card-less cash withdrawal option. This domestic money remittance service allows customers to send money to other users via a mobile phone. The recipient of the money can withdraw the amount from ATMs enabled with the card-less withdrawal option. The details required for a card less withdrawal are send to the recipient’s mobile number.
Usage of Instant Money Transfer
IMT allows users to transfer money instantly and, therefore, the feature is available 24x7. The IMT feature can be optimally used under the following circumstances:
- The recipient is in need of cash urgently.
- The transfer need to be made in cash.
- The recipient does not possess a bank account.
- The recipient’s bank account number is not available.
- The cash is not deliverable to the recipient.
Instant Money Transfer Processing:
The IMT service is completed in two phases, the initiation of the request and the withdrawal of the cash. Both these phases have been discussed in detail below:
Initiation of IMT
A customer can initiate the IMT feature online by logging into the internet banking portal and initiating IMT. The recipient is registered under this feature instantly on a one-time basis by entering the recipient’s name, mobile number and the recipient’s address details. A transaction with a registered recipient can be initiated using the recipient’s mobile number and the IMT amount. Once the IMT is initiated the recipient will receive an SMS on their mobile phone with the details of the IMT transaction. The details in the SMS should be as follows:
- The amount transferred via IMT
- A unique SMS code generated by the bank to authorize withdrawal
- A unique IMT code which is specific to each transaction
- The expiry date of the IMT
Withdrawal via IMT
After the amount is transmitted to the recipient and the IMT details have been received, the recipient may access an ATM of the payee’s bank network and opt to withdraw the cash offline via IMT. The ATM will require certain details, such as:
- The recipient’s mobile number
- The payee’s IMT code
- The IMT SMS code
- The amount transferred via IMT
After verification of the details the ATM will dispense the cash transmitted via IMT. After the usage of the SMS code, the SMS code will expire automatically.
Advantages of Instant Money Transfer
- IMT is an instant service and, therefore, saves the parties involved in the transaction a considerable amount of processing time.
- Both parties receive confirmation and details of money sent and received and privacy is maintained individually.
- Most banks have a low service charge rate for this service.
- The IMT system allows its users to maintain historical data via SMS of transactions.
- The IMT system reduces the need for physical instruments to be transported and the amount of paperwork required to perform transactions.
Limits of Instant Money Transfer
Presently, through the IMT system a customer can send a maximum amount of Rs.10,000 per transaction in multiples of Rs.100 and the recipient can withdraw a maximum of Rs.25,000 a month. These limits are not fixed and can be changed by the bank depending on the growth of the IMT service and the rules applicable under the Reserve Bank of India (RBI).