Volume : 4, Issue : 11, November - 2015

“Payment Banks” – A Newer Form of Banks to Foster Financial Inclusion in India

Dr. J. C. Pande

Abstract :

<p>Innovation and enterprise form the essence of opportunities and find reflection in every facet of our functions. With ethos of innovation the bankers have constantly endeavoured to develop new products which are suitable for their clients/ prospective clients&rsquo; base and conditions. The evolving economic landscape and aspirations of the people have driven the Govt to plan seamlessly for inclusive banking for realising the opportunities that lie within. Considering the long outstanding need for reaching out to the far flung non-banked areas of the country, the Reserve Bank of India has done well to introduce more competition among banks by authorising, in principle, a new kind of bank. On 19th Aug 2015, the RBI announced eleven approvals for Payment Banks, a stripped down version of a full service bank which is designed to reach people outside the span of formal banking services. In the present highly competitive banking; which demands evolving strategies to promote interest of all stakeholders, the need to cut costs in its product &amp; services; opening of more new full-service bank&rsquo;s structure in far flung off areas have proved unviable. The solution therefore has been to operate banks through diverse set of players--- such as Postal Department, Telecom Companies, which promise to reach people more effectively through technological advancements. This paper focuses on the likely banking revolution in the country as a result of clearance for establishment of 11 Payment Banks in India.</p>