About Payment banks 

• Payment banks are the new age banks with limited facilities. These banks mostly operate through the small vendors and shopkeepers. It exists in between the mobile wallet and regular banks.
• A payment bank provides following services to its customers.

• Accept demand deposits ( restricted upto Rs.1 lakh)
• Remittance services
• Mobile payments
• Fund transfers
• Debit card and associated services 
• Net Banking services
• Sell third-party financial products like insurance and mutual funds
• They can’t offer loans

• The Reserve Bank expects payment banks to target India’s migrant labourers, low-income households and small businesses, offering savings accounts and remittance services with a low transaction cost.

Why in News?

• The Reserve Bank of India (RBI) has doubled the maximum limit of funds account holders of payments banks to Rs 2 lakh from Rs 1 lakh earlier with immediate effect to expand the ability of such lenders to cater to the needs of MSMEs and other businesses.

Reference:

1. https://www.livemint.com/news/india/rbi-policy-payments-bank-balance-limit-doubled-to-rs-2-lakh-11617769773646.html