Encourages financial inclusion, benefits MSMEs, small traders and retail customers
In line with RBI’s revised guideline, Fino Payments Bank has increased the end of the day account balance limit to ₹2 lakh for its customers. The bank, which became profitable in the fourth quarter of financial year 2020, went live with the enhanced limit effective May 1, 2021.
As per the initial payments bank guidelines issued by RBI in 2014, the deposit limit was set at ₹1 lakh. A notification from RBI dated April 7, 2021 stated, “After reviewing the performance of payments banks, and to encourage their efforts for financial inclusion, it was decided to enhance the limit of maximum balance at end of the day from ₹1 lakh to ₹2 lakh per individual customer.”
Announcing the roll out of the new deposit limit, Ashish Ahuja, COO, Fino Payments Bank, said, “Following the RBI directive, we have updated our processes and systems and went live on May 1. The increased deposit limit allows our customers to save more money in their account. Further, our existing sweep account mechanism continues with our partner bank wherein customers can save funds in excess of Rs 2 lakh.”
Existing savings interest rate will be applicable on Fino account up to Rs 2 lakh. Funds in sweep account will get interest rates as set by Suryoday Small Finance Bank, the partner bank. It may be noted that Bank deposits are insured under Deposit Insurance and Credit Guarantee Corporation (DICGC), which is a wholly-owned subsidiary of RBI.
“The raise in limit also enhances the cause of financial inclusion as more people will join the banking fold. MSMEs, small traders and merchants are expected to make use of this offering to save time and better financial planning,” added Ahuja.