With the aim to promote digital payments banks in the country, RBI on Wednesday announced an increase in the maximum end of day balance for payment banks to ₹2 lakh. The earlier limit, which was in place since 2014, was set at ₹1 lakh per individual customer for the end of the balance for payment banks. RBI has decided to enhance the limit of maximum balance based on a review of the performance of these banks which help in increasing financial inclusion. Some of the likely beneficiaries of the step taken by RBI include migrant workers, low-income households, small businesses, and other unorganised groups. The incomes of most of these people have been adversely affected by the Covid19 pandemic.
Payment banks are a type of savings account which can accept a restricted deposit but cannot issue loans or credit cards to customers. Such banks can operate both current as well as saving accounts and can provide all other services like ATM cards, fund transfers, bill payments, recharges, net banking among others to the account holders. Some of the popular payment banks include Paytm Payments bank, Airtel Payments bank, and India Post Payments bank.
RBI also announced that it will keep interest rates unchanged, maintaining an accommodative stance
Additionally, payments banks offer zero balance or no minimum balance accounts without any additional fee and thereby differ from commercial banks which charge fees if the customer does not maintain a minimum balance in their account.
RBI governor Shaktikanta Das also announced on Wednesday that the central bank will take steps to make Prepaid payment instruments (PPIs) like wallets interoperable, after which users will be able to transfer money from one wallet to another or from a wallet to your bank account using the centralised payments systems. RBI also announced that it will keep interest rates unchanged, maintaining an accommodative stance. The repo rate has been maintained at 4 per cent and the reverse repo rate is at 3.35 per cent.