Payments Banks want RBI to increase the maximum end-of-the-day balance maintained by a customer with them from ₹2 lakh to ₹5 lakh in sync with the increment in the deposit insurance cover. According to PB executives, an improvement in the said limit will be convenient as the Deposit Insurance and Credit Guarantee Corporation (DICGC) has increased the deposit insurance cover to ₹5 lakh. DICGC insures bank deposits like fixed, current, savings, and recurring.

Earlier, under the Guidelines for licensing of PBs, issued on November 27, 2014, these banks could hold a maximum end-day balance of ₹ 1 lakh per customer. This was in sync with the then deposit insurance cover of ₹1 lakh. Even though the deposit insurance cover was increased to ₹5 lakh, with effect from February 4, 2020, the maximum end-of-the-day balance has not been increased adequately. RBI had increased the maximum end-of-the-day balance a customer can hold in a PB to ₹2 lakh on April 8, 2021. According to a top official of a PB, Micro, small and medium enterprises (MSMEs), small traders and merchants can profit if the maximum end-of-the-day balance per customer can be increased to ₹5 lakh as cash flow management will become better. Moreover, it can also increase PBs pool of low-cost current account, savings account (CASA) deposits. According to the chief of a PB, This is the right time to revise the maximum day-end deposit limit upwards considering the changing economic scenario. It will also be in keeping with the increase in the deposit insurance limit.

Currently, if a customer’s deposit with a PB at the end of the day exceeds ₹2 lakh, an auto sweep arrangement allows the PB to open a fixed deposit on behalf of the customer with a partner Bank. Like Paytm Payments Bank has a partnership with IndusInd Bank.