India Post Payments Bank – Problems and Prospect

Abstract

Payments Bank is a new kind of bank which is promoted with the express purpose of extending the reach of banking to vast majority of the unbanked and under banked segments of the population. Payments bank promoted by India Post is expected to use the physical network of post offices as well as digital platforms such as mobile, internet banking, debit cards, point of sale devices, etc. to provide the designated financial services at low cost to target population. Payments Bank might be able to provide last mile connectivity especially in those areas which do not have any bank branches but has a post office. Its’ huge presence in rural areas and the trust that it enjoys among vast segments of population might enable it to succeed where commercial banks have failed. The present study examines the role and objectives of payments banks with special reference to India Post Payments Bank, relevance in achieving financial inclusion objective, prospective challenges and problems, suggestions for overcoming those.