Fee on IMPS transactions under Rs 1000 removed by SBI

State Bank of India (SBI) on Wednesday waived charges on all money transfers of less than Rs 1,000 made through the Immediate Payment System (IMPS) channel, in a bid “to promote small ticket size transactions”. Earlier, any IMPS transfer of up to Rs 1 lakh out of an SBI bank account would attract a charge of Rs 5, in addition to service tax. Those remitting amounts between Rs 1,000 and Rs 1 lakh will continue to shell out the charge of Rs 5. The charge on transactions of over Rs 1 lakh and less than Rs 2 lakh will also remain unchanged at Rs 15. The applicable Goods and Services Tax (GST) rate will apply to all IMPS transactions of over Rs 1,000.

The reset in IMPS charges puts SBI at a disadvantage to its private sector peers. HDFC Bank, SBI’s closest rival in terms of asset-book size, earns a fee on all outgoing IMPS transactions. Account holders at the bank have to pay Rs 5 for all transfers of up to Rs 1 lakh and Rs 15 for transfers of between Rs 1 lakh and Rs 2 lakh. The charges are the same at ICICI Bank. Among other large state-owned lenders, Bank of Baroda (BoB) does not levy any charge on IMPS transactions, while Punjab National Bank (PNB) charges Rs 5 for all IMPS transactions, according to the banks’ websites.

Sources in the know said that SBI’s decision to waive charges on some IMPS transactions may have been the result of more than a nudge from the government. “We have almost been arm-twisted into doing this,” said a senior banker on condition on anonymity.

The waiver is likely to impact a sizeable chunk of IMPS users. While bank-wise data for IMPS transactions is unavailable, SBI is widely accepted to be the market leader in terms of digital transactions in general and internet banking in particular. It has a 52% market share in mobile banking, deputy managing director Manju Agarwal had told FE in March.

Like most other modes of digital payments, IMPS had seen a surge in transaction volumes amid the cash crunch arising from the government’s November 8 decision to withdraw high-value currency notes from circulation.

IMPS volumes in June added up to 65.8 million, 82% higher than the November figure of 36.2 million transactions. Transaction values for IMPS aggregated Rs 59,650 crore in June, 83.6% higher than Rs 32,480 crore in November. This puts the average IMPS transaction value at around Rs 9,065.



Source : Financial Express