A Study on Customer Awareness and Usage of Payments Bank and Neo banks in Chennai City

Abstract

The banking and financial sector has evolved over the years to meet the changing needs of the economy and industries, leading to the birth of innovative financial instruments. The Reserve Bank of India introduced payment banks to promote digital, paperless, and cashless banking in the country. Payment banks offer basic banking services to unbanked and underbanked individuals, particularly migrant workers and those from lower-income households, and bring them into the formal economy. The trend towards digital payments and net banking has increased, especially after the impact of demonetization and the COVID-19 pandemic. Neo banking is a fintech-powered concept that operates entirely in the virtual space. Technology has become crucial to satisfy customer demands, leading to the emergence of payment banks and neo banks. Despite their growing importance, research on payment banks and neo banks in India is limited. This paper aims to study customer awareness and usage of payment banks and neo banks in Chennai city.