Payments Banks users alert! Check new limit by RBI

With an aim to boost digital payments in the country, the Reserve Bank of India on Thursday has increased the limit of maximum end of day balance for Payments Banks (PBs) to Rs 2 lakh. The earlier limit allowed by the RBI was Rs 1 lakh.

The central bank in its official statement said, "It has been decided to enhance the limit of maximum balance at the end of the day from Rs 1 lakh to Rs 2 lakh per individual customer of PBs with immediate effect."

Payments Banks acts like any other normal bank, however, they operate on a smaller scale without involving any credit risk. These banks generally carry out most banking operations but cannot lend loans or issue credit cards. However, it gives a facility of debit card.

The payments banks such as Airtel Payments Bank, Paytm Payments Bank, Fino Payments Bank, Jio Payments Bank, India Post Payments Bank among others would be benefited most from this decision of the RBI.

This change in policy due to the progress made by PBs in furthering financial inclusion and with the objective of giving more flexibility to them, the central bank added further.

RBI had indicated in the guidelines that after gauging the performance of the PBs, it may consider increasing the maximum balance limit. Payments Banks have been asking the central bank for hike in limit of deposit for long time now.

The Reserve Bank of India, in August 2015, had given an approval to 11 entities to start payments bank. Airtel Payments Bank was the first one to launch payments bank in the country.

The central bank on Wednesday, while announcing its bi-monthly monetary policy, had made announced some important changes to the digital payment system. Mobile wallets and prepaid payment instruments (PPIs) were allowed to have mandatory interoperability feature, Moreover, these PPIs were also allowed to use the RTGS and NEFT facility.