Payment Banking: The next Big Shift of Financial Inclusion

                                                                    

   

The monetary system in India has endorsed marked changes since the time of liberalization. The Banking sector reforms & technologies change are main attribute for the success of banking & allied sector. A greater participation from the foreign sector, as well as the private sector, has been game changers.

The RBI Governor performing experiment to boost-up the Indian economy by making suitable changes into current framework this structure will be put in the place forward to growth. These new type of niche bank was proposed in the Nachiket Mor Committee Report on 'Comprehensive Financial Services for Small Businesses and Low Income Households'. These are expected to be game changers for India expanding banking services. RBI expected that this more will play vital role in bringing million of unbanked Indian Into the folds of bank, which is now possible by embracing the rural population.

New mode like Payment Banking license, will managed to significantly reduce the cash usage in the economy increase the flow of digital money somehow cutback the corruption and contemplated to meet credit & remittance needs of small business, unorganized sector, low income households, farmer & migrate workforce ,this kind of availability of fund advance the era.

The judgment of RBI is in favor for both financial sector and transforming India. Payment banks no threat, are feeders to the universal banks. These banks have account to regulate the flow, so that whole capitals come under the radar to universal banks. The main reason for select different sector

Payments bank would be permitted to set up its own outlets such as branches, Automated Teller Machines (ATMs), Business Correspondents (BCs), etc. to undertake only certain restricted activities permitted to banks under the Banking Regulation Act, 1949. Initially be restricted to holding a maximum balance of Rs. 100,000 per individual customer and with greater mobile money transfers and payments the dream of a cashless society can be realized as well as leakages in the system will reduce.

International experience shows that mobile money transactions and these financial innovations have been a very successful in small economy countries. These banks thus will add a much-needed financial inclusion dimension to the banking system. Over the next decade or so their functioning has the potential to bring about another revolution in the banking sector.

By: IndianHRassociates.in