RBI doubles payments bank balance limit to Rs 2 lakh

Reserve Bank of India (RBI) Governor Shaktikanta Das.

The Reserve Bank of India (RBI) on April 7 announced that small payments bank can now allow individual customers to keep a balance of up to 2 lakh.

"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.

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Payments banks had earlier urged the RBI to review the customer's deposit limit. Jointly, payments banks had requested RBI to increase the deposit limit from Rs 1 lakh to Rs 5 lakh.

Payment banks, set up to help increase financial inclusion, cannot lend money or issue credit cards. They can accept deposits and issue debit cards and ATM cards.

Read: RBI Monetary Policy - Key takeaways from Governor Shaktikanta Das' address

Some of the most popular payments banks include Paytm Payments Bank, Airtel Payments Bank, India Post Payments Bank.

Reserve Bank of India (RBI) has kept the key repo rate unchanged at 4 percent to support growth in the current situation.

RBI Governor said the Monetary Policy Committee (MPC) kept its estimate for economic growth unchanged at 10.5 percent for the current fiscal.

MPC saw inflation edging up to 5.2 per cent in the first half of the new fiscal from 5 per cent in the January-March period and moderate to 4.4 per cent in Q3 of FY22.