Indian Post Payment Bank: Financial inclusion revolution in India

Abstract

The Indian financial system has seen several significant changes since 1991. The banking industry is one of the few that has thrived sinceliberalization, and its success is unquestionably tied to the considerable financial reforms adopted by RBI and the significanttechnological improvements that have occurred over the years. In 2014, the Reserve Bank of India (RBI) broadened the variety of banksoperating inside the Indian financial sector. Payment banks and tiny banks are two names for these modern financial institutions. Themajor objective in creating these banks is to increase financial inclusion in underserved rural communities by increasing access tobanking goods and services. The unbanked and underbanked populations may be able to get access to financial services via paymentbanks, a new kind of financial institution. Expanding the availability of financial services is a top priority for them. In this paper, wediscuss the payment banking infrastructure and the benefits that are expected to accrue from it. The Post Payment Banks of Indianfinancial system will be a great first step in providing access to banking services for underserved populations, especially those who aretransient or from low-income families. Is the Indian Post Payment Bank the second phase of financial inclusion following the PradhanMantri Jan Dhan Yojana?This research aims to fill in some of the gaps in our understanding of payment banks by providing a high-leveloverview of their functioning processes and demonstrating how the idea of payment banks accomplishes two goals at once. All of theinformation in this study comes from secondary sources. As a starting step toward its financial inclusion strategy, it is increasing its digitalpayment infrastructure. The second positive effect is that it promotes a more tech-savvy mindset in the Indian banking industry. Theseresults show promise for increasing financial inclusion and access throughout India, especially in rural areas and with a focus on lowincomepeople and small businesses.Key words: Payment Banks, Financial system, Financial Inclusion, Post Payment Banks,