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Payments banks in India are reported to have asked the Union Finance Ministry to boost the deposit limit per account to Rs 5 lakh from the existing Rs 2 lakh cap, as per Business Standard’s source that was present in the meeting with Department of Financial Services Secretary M Nagaraju in New Delhi.
This is yet another attempt by payment banks to amend the guidelines, after the increment on April 2021 when the Reserve Bank of India (RBI) elevated the maximum end of day balance for Payments Banks from 1 lakh to 2 lakh rupees.
Apart from seeking a heightened deposit cap, payments banks have also sought permission to grant loans to the microfinance industry, but only up to a certain threshold. If such a drastic change were adopted, it would mark one of the greatest transformations of the payments banks scheme as they are currently mandated to exclusively invest in government securities.
A source told Business Standard, “The meeting was conducted on the status of payments banks and the…government has sought a road map for financial inclusioon.” They also spoke about the licenses Permits for small finance banks (SFBs) that payments banks can apply for after five eyars of operationsu, if they satisfy the minimum paid-up voting equity net worth capital of Rs 200 crore and other controlled by the RBI. The report further noted that Fino Payments SFB bank applied for the license last year.
The meeting was in attendance from the leading payments banks- Jio Payments bank, Airtel Payments bank, Fino Payments bank, NSDL Payments bank, India Post Payments bank, Paytm Payments bank besides officials from the RBI.
Business standard quoted a distinct source claiming the secretary of financial services commended the operations performed by India Post Payments Bank (IPPB) pertaining to financial inclusiveness and door step banking complimenting other service payments banks to broaden their scope. IPPB, being a public sector undertaking has 650 branches and more than 163000 access points across the country where they provide savings and current accounts, virtual debit cards, domestic money transfer, bill payment services, insurance services, and children enrolment services for a cap of under 5 years.
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