A Systematic Review Of Payments Banks In India: Adoption, Financial Inclusion, And Competitive Dynamics

Abstract

This systematic literature review explores the rise and impact of Payments Banks in India, an innovative approach aimed at fostering financial inclusion via digital platforms. The study addresses three core objectives: (1) to identify the key determinants of Payments Bank adoption, (2) to evaluate their role in advancing financial inclusion, and (3) to assess their implications for traditional commercial banking.

A comprehensive search was conducted across multiple databases in adherence to PRISMA guidelines, resulting in the analysis of 50 pertinent studies. The quality of the included studies was evaluated using the Mixed-Methods Appraisal Tool (MMAT).

The findings reveal that perceived ease of use, usefulness, and trust significantly influence Payments Bank adoption. Payments Banks show potential to enhance financial inclusion in rural areas via mobile services and low infrastructure needs. However, their quantifiable impact remains unclear, with competition and collaboration opportunities alongside traditional banks.

The review identifies notable research gaps, including the absence of longitudinal studies, a limited focus on rural demographics, and inconsistencies in measuring the impacts of financial inclusion. The study concludes that while Payments Banks have the potential to drive financial inclusion, their long-term viability hinges on addressing regulatory hurdles, cultivating consumer trust, and developing sustainable business models. The review offers strategic recommendations for policymakers, commercial banks, fintech companies, and researchers to optimize the role of Payments Banks within India’s evolving financial ecosystem.