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In a major boost to operations of the Payments Banks, the Reserve Bank of India on Wednesday doubled the limit of maximum balance that an individual customer can hold with them.

Accordingly, Payments Banks can now hold a maximum balance of Rs 2 lakh per individual customers at the end of the day.

The Guidelines for Licensing of Payments Banks issued on November 27, 2014 allowed such banks to hold a maximum balance of Rs 1 lakh per individual customer earlier.

RBI in its statement on developmental and regulatory policies said that the changes have been made based on a review of performance of payments banks and with a view to encourage their efforts for financial inclusion and to expand their ability to cater to the needs of their customers, including MSMEs, small traders and merchants.

A circular proposing the changes will be issued by RBI separately.