On 7th April, 2021, the RBI released its Statement on Developmental and Regulatory Policies and has decided to increase the deposit limit for payment banks to Rs. 2 Lakh per individual customer from Rs. 1 Lakh with immediate effect. Further the RBI has also increased the limit of Pre-paid instruments (PPI) to Rs. 2 Lakh per individual customer from Rs. 1 Lakh and has directed the players to ensure their services are interoperable.
RBI, as part of their Monetary Policy Committee for April 2021, said that the deposit limit for payments banks would mean that customers can deposit more funds and companies can expand their products and offerings. Payment banks are restricted from lending and can only provide deposit services up to Rs. 1 Lakh. Now with the revised rules, they can invest in government debt securities or certificate of deposits and cross-sell other financial services like payments, insurance and investments for revenue.
Pre-Paid Instrument Players
In 2017 the RBI directed PPI players (cards/wallets) to ensure that their users completed their full Know-Your-Customer (KYC) requirement. Once they completed the full-KYC process, they could load up to Rs 1 lakh in their card or wallet. However according to this new circular, this limit is raised to Rs. 2 lakh.
RBI also mandated PPI issuers to be fully interoperable with other payment acceptance infrastructures. RBI Governor Shaktikanta Das further said that, “This will enhance interoperability between payment instruments, which is currently not at a satisfactory level.”
The RBI has also decided to permit non-bank PPIs, that fulfil the full-KYC criteria, to offer cash withdrawal services. At present, only PPIs issued by banks can be used to withdraw cash from ATMs or Point-of-Sale terminals. RBI governor further said that, “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.”
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