Financial Inclusion-Role of Payment Banks in India

Abstract

Opening of new branch in every village is uneconomical for any traditional bank. Transactions through mobile phones may cover a low cost platform for basic banking services to every rural or urban citizen. India’s domestic remittance market is more than Rs. 900 Billions. The payment banks play a vital role in implementing the government’s direct benefit transfer scheme, where subsidies on healthcare, education and gas are paid directly to beneficiaries’ accounts. Keeping in mind the government's unwavered digital drive target, customers shifting from cash transactions to operating their accounts on their mobile phone, this paper discusses the objectives of primary banks, its history and services rendered by it. This paper also focuses on m-Banking, the Department of Posts, Pradhan Mantri Jan-Dhan Yojana and the India Post Payments Banks.