NEW DELHI: The Reserve Bank of India (RBI) today increased the maximum end-of-day balance for payment banks to Rs 2 lakh in an attempt to encourage digital payments banks in the country.
Previously, the limit was at Rs 1 lakh. For a long time, payment banks have been requesting an increase in the deposit cap.
“The current ‘Guidelines for Licensing of Payments Banks’, which were issued on November 27, 2014, allow payments banks to keep a maximum balance of Rs 1 lakh per individual customer. Following a review of payments banks’ results, it was agreed to increase the maximum balance at the end of the day from Rs 1 lakh to Rs 2 lakh per individual customer in order to promote their efforts for financial inclusion and to extend their capacity to cater to the needs of their customers, including MSMEs, small traders, and merchants.” According to a Reserve Bank of India statement, a circular in this regard will be released separately.
Sources said, the current limit on maximum end of day balance of Rs 1 lakh per individual customer is being increased to Rs 2 lakh with immediate effect, with a view to furthering financial inclusion and expanding the capacity of payments banks to cater to the increasing needs of their customers.
To increase financial inclusion the central bank founded payments banks in the country. The aim is to provide migrant workers, low-income families, small businesses, other unorganised sector organisations and other users with small savings accounts, payments and remittance services.
The RBI gave 11 entities in-principle approval to start a payments bank in August 2015. Airtel Payments Bank was the country’s first payments bank to operate. In January 2017, the India Post Payments Bank (IPPB) began operations at two pilot branches. Paytm Payments Bank and Fino Payments Bank are two other common payment banks.
Support our brand of fearless and investigative journalism: