Maximum end-of-day balance hiked from Rs 1 lakh to Rs 2 lakh for Payments Banks – Check details

The Reserve Bank of India (RBI) in its Statement on Developmental and Regulatory Policies issued on April 7, 2021, has stated that there has been 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.

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.