Payment Banking in India-Its Scope and Importance in Present Scenario

Indian banking industry has faced drastic changes after the globalization, privatization and liberalization. The industry is now become one of the fastest growing service sector in India. Apart from the traditional banking activities, now banks are providing wide varieties of innovative services and offer number of differentiated products to the customers. The way of banking has been completely changed and the banking is now become the most vibrant sector. The banking sector has the important role in any economy especially an economy like India. Introduction of latest technology in banking sector has routed the tremendous changes in the face of banking. Although banking sector has now having great modernization in its pace and pattern, Indian banking industry now focuses on the prime objective of the economic growth, that is financial inclusion and thereby inclusive growth. Attainment of growth with the participation of all the sectors of the society is a great challenge to the Indian economy. RBI made it mandatory to banks to undertake the financial inclusion programs and policies with the objective of attaining the inclusive growth. Several measures have been introduced by RBI for the same which includes, SHG bank linkage programs, Kisan Credit Cards, Rupay Cards etc. Among these measures, most recent one is issuing license to start payment banks, with the objective of including the vulnerable group of the society, such as low income households, migrant labors, small businesses etc. to the main stream of the economy. Present paper is an attempt to describe the payment banking, its scope objectives and the rationale behind the introduction of such banks in Indian economy