Vol. 11, Special Issue 11, Part A (2025)

Abstract
In India, financial inclusion is one of the national development priorities particularly among the unbanked and underbanked communities in the rural and semi urban areas. The reserve bank of India introduced payment banks in 2015, which were developed as affordable technology-based institutions to improve financial access by providing small savings services, digital payment services and remittance services. This empirical paper assesses the performance of payment banks by evaluating the major determinants of effective performance of payment banks, including the accessibility of the services, adoption of digital, cost-effectiveness, trust and security, and customer awareness. Based on the PLS-SEM analysis of primary data collected on 200 respondents, it can be found that the payment banks have a positive impact on access and digital use, but the overall effect is not high with the mainstream financial institutions because of structural and regulatory constraints. The paper ends by recommending policies that would make payment banks operationally viable and reach more people so that they can have a significant role in the financial inclusion environment of India.