RBI Policy:Hikes payments bks day-end deposit limit to 200,000 rupees

Informist, Wednesday, Apr 7, 2021


MUMBAI – Payments banks will now be able to accept deposits of up to 200,000 rupees, as the Reserve Bank of India today hiked the limit from the current 100,000 rupees. 

In a statement accompanying the central bank's Monetary Policy Statement today, the RBI said it had increased the limit of maximum balance at the end of day to 200,000 rupees per individual customer for payments banks.


This was after a review of the 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 customers, including micro, small and medium enterprises, small traders and merchants, Governor Shaktikanta Das said today.

Currently, there are six payments banks operational in the country. 


In 2018, the central bank had penalised and directed FINO Payments Bank to stop all account activities after RBI found out there were a few accounts with the bank with deposits in excess of 100,000 rupees, which went against the licensing criteria of payments banks.


Today, the RBI also said it would construct and periodically publish a 'financial inclusion index' to measure the extent of financial inclusion in the country. The index would be based on multiple parameters, and would reflect the broadening and deepening of financial inclusion.


To begin with, the index will be published annually in July for the financial year ending the previous March, the RBI said.


The central bank has also proposed to make it mandatory for prepaid payment instrument issuers fully compliant with know-your-customer norms to be fully interoperable with other payments acceptance infrastructure. After the RBI issued guidelines in 2018 on enabling interoperability on a voluntary basis, Das today said the migration towards it had not been "significant."


The RBI will also allow customer balances up to 200,000 rupees for such instruments to incentivise prepaid payment instruments to migrate to full know-your-customer compliance. Currently, a customer can hold up to 100,000 rupees of balance in the instrument.


The central bank has also allowed cash withdrawals from fully-KYC compliant prepaid payment instruments issued by non-bank lenders. The cash withdrawal is currently allowed for only fully-KYC compliant prepaid payment instruments issued by banks.


"The measure, in conjunction with the mandate for interoperability, will give boost to migration to full-KYC PPIs and would also complement the acceptance infrastructure in tier-III to VI centres," Das said, adding that the necessary instructions would be issued separately.


According to the Statement on Developmental and Regulatory Policies, the central bank has also proposed to enable payment system operators regulated by the RBI to take direct membership in a phased manner in centralised payment systems–real time gross settlement system and national electronic fund transfer.


Payment system operators include prepaid payment instrument issuers, card networks, white label automated teller machine operators, and trade receivables discounting system platforms.


"These entities will, however, not be eligible for any liquidity facility from the Reserve Bank to facilitate settlement of their transactions in these CPSs," the central bank said. Necessary instructions on this will be issued separately.  End


Reported by Shreejit Nair

Edited by Avishek Dutta


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