New Arena in Banking Sector – Payment Banks in India

Abstract

After a long period, the concept of “financial inclusion” was finally recognised in India's banking industry. The goal of RBI has always been to include unbanked regions in normal banking operations by covering small villages and low-income households. Digital payments after the COVID-19 pandemic have increased banking operations in rural areas. Pradhan Mantri Jan Dhan Yojna also helped increase the number of bank accounts in rural areas, but many accounts are still inaccessible. A recent report by the World Bank found that 21% of Indians still do not have bank accounts. So, RBI has developed differentiated banking called Payment Banks to reach the rural population. The present paper discusses the concept of payment banks, their inception and the role of payment banks in India. For the study purpose, secondary data was collected from various sources.