What changed
The maximum balance per individual customer at end of day for Payments Banks has been increased from ₹1 lakh to ₹2 lakh. This change is effective from April 8, 2021, and all other terms of the 2014 Licensing Guidelines remain unchanged.
What it means for you
Payments Banks can now allow customers to hold higher balances, reducing the need for frequent transfers to other accounts. This enhances customer convenience and supports PBs in offering more competitive services. Banks should update their systems and customer communication to reflect the new limit.
What you must do
- Update internal systems and processes to allow end-of-day balances up to ₹2 lakh per customer.
- Communicate the new limit to customers through channels like SMS, app notifications, and branch signage.
- Review and adjust any product offerings or fee structures that were tied to the old ₹1 lakh limit.
- Ensure compliance with all other unchanged terms of the 2014 Licensing Guidelines.
Who it affects
Payments Banks, Customers of Payments Banks, RBI supervision teams
Why did RBI increase the balance limit for Payments Banks?
RBI noted the progress PBs have made in financial inclusion and wanted to give them more flexibility. The increase from ₹1 lakh to ₹2 lakh per customer at end of day was announced in the April 2021 developmental policy statement.
Does this change affect any other rules for Payments Banks?
No. All other terms and conditions of the 2014 Licensing Guidelines for Payments Banks remain unchanged. Only the end-of-day balance limit has been revised.
When does the new limit take effect?
The enhancement is effective immediately from April 8, 2021, the date of the circular.