The Reserve Bank of India (RBI) on Thursday issued a notification allowing payments banks to act as business correspondents (BCs) of other banks.
The Reserve Bank of India (RBI) on Thursday issued a notification allowing payments banks to act as business correspondents (BCs) of other banks. Under the BC arrangement and with prior consent of their customers, payments banks will be allowed to transfer funds deposited by a customer into his/her account with another eligible bank in cases where the balance in the account with the payments bank does not exceed Rs 1 lakh or a lower amount as specified by the customer. Payments banks will not have rights to operate or have real-time access to funds available in the account of the customer at the other bank.
However, as a business correspondent of a bank, these banks will be allowed to facilitate withdrawals and transfers by the customer from their accounts with banks for whom they are a BC. “It is reiterated for clarity that PBs (payment banks) shall not initiate any debit transactions in the customer’s account, held with another bank, under a power of attorney or general consent of the customer,” the central bank said.