RBI hikes payments bank deposit limit hiked to Rs 2 lakh

RBI hikes payments bank deposit limit hiked to Rs 2 lakh

This limit is hiked per borrower against the pledge/hypothecation of agricultural produce

In an effort to boost digital payments banks, the Reserve Bank of India (RBI) on Wednesday announced that it has hiked the maximum end of day balance for payment banks to Rs 2 lakh from Rs 1 lakh earlier.

RBI Governor Das in his address post MPC meet said, "The Reserve Bank had issued guidelines in October 2018 for adoption of interoperability on a voluntary basis for full-KYC Prepaid Payment Instruments (PPIs). As the migration towards interoperability has not been significant, it is now proposed to make interoperability mandatory for full-KYC PPIs and for all payment acceptance infrastructure."

"To incentivise the migration of PPIs to full-KYC, it is proposed to increase the current limit on outstanding balance in such PPIs from Rs 1 lakh to Rs 2 lakh," he added.

RBI hikes payments bank deposit limit hiked to Rs 2 lakh
RBI planning to withdraw old Rs 100 notes

With a view to encouraging farm credit to individual farmers against pledge/hypothecation of agricultural produce, the central bank has also decided to enhance the loan limit under priority sector lending (PSL) from Rs 50 lakh to Rs 75 lakh per borrower

This limit is hiked per borrower against the pledge/hypothecation of agricultural produce backed by Negotiable Warehouse Receipts (NWRs)/electronic-NWRs (e-NWRs) issued by warehouses registered with the Warehousing Development and Regulatory Authority (WDRA). For other Warehouse Receipts, the loan limit for classification under PSL will continue to be ₹50 lakh per borrower.

Meanwhile, the central bank also announced that membership to the RBI-operated Centralised Payment Systems (CPSs) – RTGS and NEFT, which was currently limited to banks, with a few exceptions, is now proposed to enable non-bank payment system operators like Prepaid Payment Instrument (PPI) issuers, card networks, White label ATM operators and Trade Receivables Discounting System (TReDS) platforms regulated by the Reserve Bank, to take direct membership in CPSs.

This facility is expected to minimise settlement risk in the financial system and enhance the reach of digital financial services to all user segments.

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