Payment Bank: Indian Post Payment Bank towards financial inclusion through Digitalization

Abstract

In India, due to the financial deprivation of the poor and disadvantaged it has resulted in many citizens not being able to properly access important banking institutions and services that hinder the growth and financial progress of a few. This is very common in rural areas, hence the need to address the above problem. India's financial system has seen dramatic changes since 1991. The banking sector is one of the most efficient after the liberation, and success can be attributed to the major banking changes made by the RBI and other major technological changes that have taken place over the years. In 2014, the RBI introduced two new categories of banks in the Indian financial system, namely Payment Banks and Small Banks. The main purpose of introducing these banks is to increase investment and to distribute financial product and services in undeveloped rural areas. This paper introduces the framework for payment banks, as well as the expected benefits from payment banks. How this India Post Payment Bank will be an amazing step in providing financial services to customers, especially migrant workers and those from low-income households, as well as bringing them into the formal financial system. This paper is based entirely on the second data to give an overview of the payment bank and its operation and how the concept of the payment bank kills two birds with one stone. First, its move towards a financial inclusion program by expanding digital payment infrastructure. Second, it promotes a culture of financial technology in Indian banks. The positive findings in the depth of financial services and financial inclusion in India, especially in rural areas, are mainly focused on low-income groups and small businesses.