In major push to payments banks (PBs), the Reserve Bank of India (RBI) went ahead and raised the maximum balance at the end of the day to Rs 2 lakh per customer soon after the governor Shaktikanta Das announced the decision to enhance the limit.
Why the limit has been raised?
The decision to increase the limit of maximum balance at the end of the day from Rs 1 lakh to 2 lakh per individual customer of PBs is aimed at furthering financial inclusion and offering more flexibility to the PBs, according to the apex body. Also Read: ITR Forms FY 2020-21: Check Latest Changes Made In Tax Forms
Previously, the payments banks can hold a maximum balance of Rs 1 lakh per individual customer at the end of the day. Also, note that the payment banks are allowed to accept current deposits, and savings bank deposits from individuals, small businesses and other entities. However, such banks are not allowed to give out loans.
Who are the major players?
Major players in the space include Paytm Payments Bank, India Post Payments Bank, Airtel Payments Bank, Fino Payments Bank, Jio Payments Bank and NSDL (National Securities Depository Ltd) Payments Bank.
Will it help the customers?
Earlier, interest rates on customer deposits offered wee higher but now these rates came down drastically to as low as 2.5 per centper annum on savings account deposits. As per the report in Mint, for deposits, the payments banks are considered to be reasonably safe because the money is below the Rs 5 lakh guarantee provided by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
So, it doesn’t really change even now. The individual Rs 2 lakh deposit will still be covered under the DICGC insurance scheme which offers the insurance limit for up to ₹5 lakh.