Payment Banks An Overview

Abstract

Lack of awareness of the structured Financial System and an unregulated or disorganised Rural Banking System, prevented most rural population from depositing their savings in banks. The introduction of Payment banks in the rural, semi urban and interior pockets will change this scenario, usage of and access to the system will help people understand it’s functioning and help in channelizing the saving of the people in these areas. It will also give government access to funds for development activities. The Reserve Bank of India ‘s initiative of introducing ‘’ Payment Banks” finds resonance with Economist Adam Smith’s Theory of employing Division of labour to exponentially increase productivity. The new business model Adopted will create a revolutionary trend in the Indian Banking Industry and will accelerate Government‘s Mission of improving Financial Literacy and achieving Total Financial Inclusion (TFI), both vital for a country’s Economic Development.