Payments banks account can now hold maximum balance of Rs 2 lakh: RBI
Payments banks are similar to normal banks but do not offer full-fledged services of a normal bank.
RBI has doubled the limit of maximum balance that an individual customer can hold with payments banks to 2 lakh from 1 lakh earlier with immediate effect to expand the ability of such lenders to cater to the needs of MSMEs and other businesses.
The payments banks that are operating in this space are Paytm Payments Bank, India Post Payments Bank, Airtel Payments Bank, Jio Payments Bank and NSDL (National Securities Depository Ltd) Payments Bank.
The announcement in this regard was made by RBI Governor Shaktikanta Das after the meeting of the Monetary Policy Committee on Wednesday, April 7.
Payments banks are not allowed to give out loans. The enhancement of maximum balance of accounts maintained with payment banks from 1 lakh to 2 lakh per individual customer should help in deepening financial inclusion and address the growing banking needs of account holders of payment banks.
The proposals to make KYC Prepaid Payment Instruments (PPIs) mandatorily interoperable, increase their maximum balance to 2 lakh and allow cash withdrawals through these instruments will further deepen the adoption of digital payment systems, especially in the smaller urban and rural centers.
The decision to double the limit was based on a review of the performance of payments banks and with a view to encourage their efforts for financial inclusion and to expand their ability to cater to the needs of their customers, including MSMEs, small traders and merchants.
Payments bank were launched to further provide banking services to the underserved population who are yet to open a bank account with the normal commercial bank. Payments banks are similar to normal banks but do not offer full-fledged services of a normal bank.
The payments banks are allowed to accept the current deposits, and savings bank deposits from individuals, small businesses and other entities, as permitted.