The RBI has now decided to enhance the limit of maximum balance at end of the day from Rs 1 lakh to Rs 2 lakh per individual customer.
The Reserve Bank of India (RBI) in its Statement on Developmental and Regulatory Policies issued on April 7, 2021, has stated that there will be an enhancement of limit of maximum balance per customer at end of the day from Rs 1 lakh to Rs 2 lakh for Payments Banks. Satish Gupta, MD & CEO of Paytm Payments Bank Ltd said, “The decision by the Reserve Bank of India to increase the limit on maximum end-of-day balance to Rs 2 lakh for Payments Banks account holders is a welcome step and will enable us to cater to the growing needs of our customers. Similarly, the increase in the current limit on the outstanding balance in full KYC PPIs from Rs 1 lakh to Rs 2 lakh will incentivize migration to full KYC PPIs which will further bring financial inclusion across the country. We support an open and interoperable digital payments ecosystem and are looking forward to the detailed guidelines on this subject.”
The guidelines for Licensing of Payments Banks issued in 2014 allowed payments banks to hold a maximum balance of Rs 1 lakh per individual customer. Based on a review of 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, the RBI has now decided to enhance the limit of maximum balance at end of the day from Rs 1 lakh to Rs 2 lakh per individual customer.
All Payment Banks such as Paytm Payments Bank and Airtel Payments Bank and India Post Payments Bank, amongst others, are governed by the RBI. As per the guidelines for Payment Banks, from now they cannot accept deposits of more than Rs 2 lakh from one account holder and these banks are not allowed to lend money. However, they may provide all other services such as ATM card, fund transfer, bill payments, recharges, net banking etc to the account holders.
One may avail various banking services such as opening of savings and current accounts, transfer of money, direct benefit transfers (DBT), bill and utility payments, and so on. It remains to be seen if the interest rate offered by them becomes more competitive and whether there will be enhancement in the services they provide to the account holders.