In a proposal to promote digital payments banks in the country, the Reserve Bank of India (RBI) on Wednesday announced that it has actually boosted the maximum end of day balance for payment banks to Rupees 2 lakh. Earlier, the limit was Rupees 1 lakh. These banks have been asking a hike in deposit limitation for a long time.
“The extant ‘Guidelines for Licensing of Payments Banks’ issued on November 27, 2014 enable payments banks to hold a maximum balance of 1 lakh per individual client. Based upon a review of performance of payments financial institutions and with a view to encourage their initiatives for economic inclusion as well as to increase their capability to satisfy the needs of their consumers, including MSMEs, small traders and sellers, it has actually been made a decision to boost the limit of optimum balance at end of the day from 1 lakh to 2 lakh per private consumer. A circular hereof shall be released individually,” according to declaration by Reserve Bank of India.
The central bank introduced payments banks in the country to enhance financial inclusion. The goal is to give tiny interest-bearing accounts, payments and remittance services to migrant labour workforce, low income households, small companies, various other unorganised field entities and also other customers.
In August 2015, RBI had actually provided in-principle authorization to 11 entities to begin these banks. Airtel Payments Bank was the very first one to introduce payments bank in the nation. India Post Payments Bank (IPPB) had begun procedures at 2 pilot branches in January 2017. A few other popular payments financial institution are Paytm Payments Bank and also Fino Settlements Financial Institution.
Payments financial institution intends to further economic inclusion, especially through savings accounts and payments solutions. These financial institutions currently offer rate of interest comparable to that being offered by normal banks. A payments financial institution is not enabled to give any kind of kind of loan or release a bank card, which is additionally a form of unsecured personal loan.