RBI hikes payments bank deposit: In an effort to boost digital payments banks, the Reserve Bank of India (RBI) on Wednesday announced that it has hiked the maximum end of day balance for payment banks to Rs 2 lakh from Rs 1 lakh earlier. “With a view to furthering the financial inclusion and to expand the ability of payments bank to cater to the growing needs of their customers, the current limit on maximum end of day balance of Rs 1 lakh is being increased to Rs 2 lakh per customer with immediate effect,” RBI governor Shaktikanta Das said.
As per the Statement on Development and Regulatory Policies: The extant “Guidelines for Licensing of Payments Banks” issued on November 27, 2014 allow 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, it has been decided to enhance the limit of maximum balance at end of the day from Rs 1 lakh to Rs 2 lakh per individual customer. A circular in this regard shall be issued separately.
With a view to encouraging farm credit to individual farmers against pledge/hypothecation of agricultural produce, the central bank has also decided to enhance the loan limit under priority sector lending (PSL) from Rs 50 lakh to Rs 75 lakh per borrower
This limit is hiked per borrower against the pledge/hypothecation of agricultural produce backed by Negotiable Warehouse Receipts (NWRs)/electronic-NWRs (e-NWRs) issued by warehouses registered with the Warehousing Development and Regulatory Authority (WDRA). For other Warehouse Receipts, the loan limit for classification under PSL will continue to be ₹50 lakh per borrower.
Meanwhile, the central bank also announced that membership to the RBI-operated Centralised Payment Systems (CPSs) – RTGS and NEFT, which was currently limited to banks, with a few exceptions, is now proposed to enable non-bank payment system operators like Prepaid Payment Instrument (PPI) issuers, card networks, White label ATM operators and Trade Receivables Discounting System (TReDS) platforms regulated by the Reserve Bank, to take direct membership in CPSs.
This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments.