Payments banks' search for right business model

Sandwiched between commercial banks and pure-play payments service providers, payments banks do not enjoy a level playing field

More than four years after the first payments bank started operations in India, the banking regulator has doubled the maximum limit of funds that a depositor can keep with such a bank to Rs 2 lakh. This has been done to help “financial inclusion” and “expand the ability of payments banks to cater to the growing needs of their customers”.
 
How will doubling the deposit-taking ability help such banks?
 
First, let’s take a look at the performance of this set of banks. In August 2015, the Reserve Bank of India (RBI) gave conditional licences to 11, including a