Big Boost for Mobile Banking by RBI

If you've read recent leading dailies, you must have seen most of their front page coverage about payments bank. If you haven’t read the news, here’s the gist – The Reserve Bank of India on Wednesday ‘in principle’ cleared 11 entities to set up payments bank. A payments bank is a form of non-full service niche bank with some limitations. It can only provide remittances and receive deposits but it can’t carry out lending activities.

The decision is expected to bring revolution in the entire banking sector and hopefully help India reach its financial inclusion target by a decade. It will be immensely helpful for migrant , low income households, small businesses, and un-organized sector. Customers will benefit in a number of ways – service charges will come down to a remarkable low, the requirement to maintain a minimum balance will soon become redundant, competition from the new entities will force existing leading banks to offer low cost basic accounts and provide many other consumer oriented services. It will also revolutionize government’s social welfare and subsidy schemes, and cash-less banking will soon become a practical reality across the country including remote areas.
But the most important achievements payments banks are expected are generate are –
(1) It will influence masses to turn to mobile phones for taking financial decisions. This will make the country more technology-enabled and a rise in mobile applications, mobile branding will take place.
(2) It will help people living in remote areas to become more financially able by providing them quick access to different alternatives for financial investments and reducing the gap between their home to bank with mobile banking facility.
How payments banks will lead change using mobile technology and help the rural India become more financially-able?
Payments banks will essentially require mobile technology as vehicle of their service to reach to people living in villages and remote areas. Mobiles reach where humans don’t. For deposit and other important activities, people will therefore use mobile phones. Soon, mobile phones will become the virtual ATM and small-payments cheque-book.
Companies will set up more resources, towers to reach remote areas. Payments bank service providers will then need specialized and easy to use mobile applications. Branding themselves on mobile phones to target geography based audiences will become important. As things get easy, people will come up and invest
So, payments banks are expected to bring revolution mainly in remote areas and the trend will push the importance of developing service focused mobile applications, mobile advertisements and branding.

The entities that received nod to set up payments banks are now deploying effort, time and resources to develop workable model to materialize their ambitious payments banks service. Hope they do well, and in doing so, India develops! 
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