diff --git a/cmd/admin-handlers.go b/cmd/admin-handlers.go
index dc1c58629..746c16dd5 100644
--- a/cmd/admin-handlers.go
+++ b/cmd/admin-handlers.go
@@ -106,7 +106,7 @@ func (a adminAPIHandlers) ServiceStatusHandler(w http.ResponseWriter, r *http.Re
 	// of read-quorum availability.
 	uptime, err := getPeerUptimes(globalAdminPeers)
 	if err != nil {
-		writeErrorResponseJSON(w, toAPIErrorCode(err), r.URL)
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
 		logger.LogIf(context.Background(), err)
 		return
 	}
@@ -731,41 +731,7 @@ func (a adminAPIHandlers) RemoveUser(w http.ResponseWriter, r *http.Request) {
 	accessKey := vars["accessKey"]
 	if err := globalIAMSys.DeleteUser(accessKey); err != nil {
 		logger.LogIf(ctx, err)
-		writeErrorResponseJSON(w, ErrInternalError, r.URL)
-		return
-	}
-}
-
-// RemoveUserPolicy - DELETE /minio/admin/v1/remove-user-policy?accessKey=<access_key>
-func (a adminAPIHandlers) RemoveUserPolicy(w http.ResponseWriter, r *http.Request) {
-	ctx := newContext(r, w, "RemoveUserPolicy")
-
-	// Get current object layer instance.
-	objectAPI := newObjectLayerFn()
-	if objectAPI == nil {
-		writeErrorResponseJSON(w, ErrServerNotInitialized, r.URL)
-		return
-	}
-
-	// Validate request signature.
-	adminAPIErr := checkAdminRequestAuthType(r, "")
-	if adminAPIErr != ErrNone {
-		writeErrorResponseJSON(w, adminAPIErr, r.URL)
-		return
-	}
-
-	// Deny if WORM is enabled
-	if globalWORMEnabled {
-		writeErrorResponseJSON(w, ErrMethodNotAllowed, r.URL)
-		return
-	}
-
-	vars := mux.Vars(r)
-	accessKey := vars["accessKey"]
-	if err := globalIAMSys.DeletePolicy(accessKey); err != nil {
-		logger.LogIf(ctx, err)
-		writeErrorResponseJSON(w, ErrInternalError, r.URL)
-		return
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
 	}
 }
 
@@ -867,14 +833,140 @@ func (a adminAPIHandlers) AddUser(w http.ResponseWriter, r *http.Request) {
 
 	if err = globalIAMSys.SetUser(accessKey, uinfo); err != nil {
 		logger.LogIf(ctx, err)
-		writeErrorResponseJSON(w, ErrInternalError, r.URL)
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
 		return
 	}
 }
 
-// AddUserPolicy - PUT /minio/admin/v1/add-user-policy?accessKey=<access_key>
-func (a adminAPIHandlers) AddUserPolicy(w http.ResponseWriter, r *http.Request) {
-	ctx := newContext(r, w, "AddUserPolicy")
+// ListCannedPolicies - GET /minio/admin/v1/list-canned-policies
+func (a adminAPIHandlers) ListCannedPolicies(w http.ResponseWriter, r *http.Request) {
+	ctx := newContext(r, w, "ListCannedPolicies")
+
+	// Get current object layer instance.
+	objectAPI := newObjectLayerFn()
+	if objectAPI == nil {
+		writeErrorResponseJSON(w, ErrServerNotInitialized, r.URL)
+		return
+	}
+
+	// Validate request signature.
+	adminAPIErr := checkAdminRequestAuthType(r, "")
+	if adminAPIErr != ErrNone {
+		writeErrorResponseJSON(w, adminAPIErr, r.URL)
+		return
+	}
+
+	policies, err := globalIAMSys.ListCannedPolicies()
+	if err != nil {
+		logger.LogIf(ctx, err)
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
+		return
+	}
+
+	if err = json.NewEncoder(w).Encode(policies); err != nil {
+		logger.LogIf(ctx, err)
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
+		return
+	}
+
+	w.(http.Flusher).Flush()
+}
+
+// RemoveCannedPolicy - DELETE /minio/admin/v1/remove-canned-policy?name=<policy_name>
+func (a adminAPIHandlers) RemoveCannedPolicy(w http.ResponseWriter, r *http.Request) {
+	ctx := newContext(r, w, "RemoveCannedPolicy")
+
+	// Get current object layer instance.
+	objectAPI := newObjectLayerFn()
+	if objectAPI == nil {
+		writeErrorResponseJSON(w, ErrServerNotInitialized, r.URL)
+		return
+	}
+
+	vars := mux.Vars(r)
+	policyName := vars["name"]
+
+	// Validate request signature.
+	adminAPIErr := checkAdminRequestAuthType(r, "")
+	if adminAPIErr != ErrNone {
+		writeErrorResponseJSON(w, adminAPIErr, r.URL)
+		return
+	}
+
+	// Deny if WORM is enabled
+	if globalWORMEnabled {
+		writeErrorResponseJSON(w, ErrMethodNotAllowed, r.URL)
+		return
+	}
+
+	if err := globalIAMSys.DeleteCannedPolicy(policyName); err != nil {
+		logger.LogIf(ctx, err)
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
+		return
+	}
+}
+
+// AddCannedPolicy - PUT /minio/admin/v1/add-canned-policy?name=<policy_name>
+func (a adminAPIHandlers) AddCannedPolicy(w http.ResponseWriter, r *http.Request) {
+	ctx := newContext(r, w, "AddCannedPolicy")
+
+	// Get current object layer instance.
+	objectAPI := newObjectLayerFn()
+	if objectAPI == nil {
+		writeErrorResponseJSON(w, ErrServerNotInitialized, r.URL)
+		return
+	}
+
+	vars := mux.Vars(r)
+	policyName := vars["name"]
+
+	// Validate request signature.
+	adminAPIErr := checkAdminRequestAuthType(r, "")
+	if adminAPIErr != ErrNone {
+		writeErrorResponseJSON(w, adminAPIErr, r.URL)
+		return
+	}
+
+	// Deny if WORM is enabled
+	if globalWORMEnabled {
+		writeErrorResponseJSON(w, ErrMethodNotAllowed, r.URL)
+		return
+	}
+
+	// Error out if Content-Length is missing.
+	if r.ContentLength <= 0 {
+		writeErrorResponseJSON(w, ErrMissingContentLength, r.URL)
+		return
+	}
+
+	// Error out if Content-Length is beyond allowed size.
+	if r.ContentLength > maxBucketPolicySize {
+		writeErrorResponseJSON(w, ErrEntityTooLarge, r.URL)
+		return
+	}
+
+	iamPolicy, err := iampolicy.ParseConfig(io.LimitReader(r.Body, r.ContentLength))
+	if err != nil {
+		writeErrorResponseJSON(w, ErrMalformedPolicy, r.URL)
+		return
+	}
+
+	// Version in policy must not be empty
+	if iamPolicy.Version == "" {
+		writeErrorResponseJSON(w, ErrMalformedPolicy, r.URL)
+		return
+	}
+
+	if err = globalIAMSys.SetCannedPolicy(policyName, *iamPolicy); err != nil {
+		logger.LogIf(ctx, err)
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
+		return
+	}
+}
+
+// SetUserPolicy - PUT /minio/admin/v1/set-user-policy?accessKey=<access_key>&name=<policy_name>
+func (a adminAPIHandlers) SetUserPolicy(w http.ResponseWriter, r *http.Request) {
+	ctx := newContext(r, w, "SetUserPolicy")
 
 	// Get current object layer instance.
 	objectAPI := newObjectLayerFn()
@@ -885,6 +977,7 @@ func (a adminAPIHandlers) AddUserPolicy(w http.ResponseWriter, r *http.Request)
 
 	vars := mux.Vars(r)
 	accessKey := vars["accessKey"]
+	policyName := vars["name"]
 
 	// Validate request signature.
 	adminAPIErr := checkAdminRequestAuthType(r, "")
@@ -901,38 +994,13 @@ func (a adminAPIHandlers) AddUserPolicy(w http.ResponseWriter, r *http.Request)
 
 	// Custom IAM policies not allowed for admin user.
 	if accessKey == globalServerConfig.GetCredential().AccessKey {
-		writeErrorResponse(w, ErrInvalidRequest, r.URL)
+		writeErrorResponseJSON(w, ErrInvalidRequest, r.URL)
 		return
 	}
 
-	// Error out if Content-Length is missing.
-	if r.ContentLength <= 0 {
-		writeErrorResponse(w, ErrMissingContentLength, r.URL)
-		return
-	}
-
-	// Error out if Content-Length is beyond allowed size.
-	if r.ContentLength > maxBucketPolicySize {
-		writeErrorResponse(w, ErrEntityTooLarge, r.URL)
-		return
-	}
-
-	iamPolicy, err := iampolicy.ParseConfig(io.LimitReader(r.Body, r.ContentLength))
-	if err != nil {
-		writeErrorResponse(w, ErrMalformedPolicy, r.URL)
-		return
-	}
-
-	// Version in policy must not be empty
-	if iamPolicy.Version == "" {
-		writeErrorResponse(w, ErrMalformedPolicy, r.URL)
-		return
-	}
-
-	if err = globalIAMSys.SetPolicy(accessKey, *iamPolicy); err != nil {
+	if err := globalIAMSys.SetUserPolicy(accessKey, policyName); err != nil {
 		logger.LogIf(ctx, err)
-		writeErrorResponse(w, ErrInternalError, r.URL)
-		return
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
 	}
 }
 
@@ -1198,7 +1266,7 @@ func (a adminAPIHandlers) UpdateAdminCredentialsHandler(w http.ResponseWriter,
 
 	creds, err := auth.CreateCredentials(req.AccessKey, req.SecretKey)
 	if err != nil {
-		writeErrorResponseJSON(w, toAPIErrorCode(err), r.URL)
+		writeErrorResponseJSON(w, toAdminAPIErrCode(err), r.URL)
 		return
 	}
 
diff --git a/cmd/admin-router.go b/cmd/admin-router.go
index c91454a97..f9cb38190 100644
--- a/cmd/admin-router.go
+++ b/cmd/admin-router.go
@@ -81,15 +81,23 @@ func registerAdminRouter(router *mux.Router) {
 
 	// -- IAM APIs --
 
+	// Add policy IAM
+	adminV1Router.Methods(http.MethodPut).Path("/add-canned-policy").HandlerFunc(httpTraceHdrs(adminAPI.AddCannedPolicy)).Queries("name", "{name:.*}")
+
 	// Add user IAM
 	adminV1Router.Methods(http.MethodPut).Path("/add-user").HandlerFunc(httpTraceHdrs(adminAPI.AddUser)).Queries("accessKey", "{accessKey:.*}")
-	adminV1Router.Methods(http.MethodPut).Path("/add-user-policy").HandlerFunc(httpTraceHdrs(adminAPI.AddUserPolicy)).Queries("accessKey", "{accessKey:.*}")
+	adminV1Router.Methods(http.MethodPut).Path("/set-user-policy").HandlerFunc(httpTraceHdrs(adminAPI.SetUserPolicy)).
+		Queries("accessKey", "{accessKey:.*}").Queries("name", "{name:.*}")
+
+	// Remove policy IAM
+	adminV1Router.Methods(http.MethodDelete).Path("/remove-canned-policy").HandlerFunc(httpTraceHdrs(adminAPI.RemoveCannedPolicy)).Queries("name", "{name:.*}")
 
 	// Remove user IAM
 	adminV1Router.Methods(http.MethodDelete).Path("/remove-user").HandlerFunc(httpTraceHdrs(adminAPI.RemoveUser)).Queries("accessKey", "{accessKey:.*}")
-	adminV1Router.Methods(http.MethodDelete).Path("/remove-user-policy").HandlerFunc(httpTraceHdrs(adminAPI.RemoveUserPolicy)).Queries("accessKey", "{accessKey:.*}")
 
 	// List users
 	adminV1Router.Methods(http.MethodGet).Path("/list-users").HandlerFunc(httpTraceHdrs(adminAPI.ListUsers))
 
+	// List policies
+	adminV1Router.Methods(http.MethodGet).Path("/list-canned-policies").HandlerFunc(httpTraceHdrs(adminAPI.ListCannedPolicies))
 }
diff --git a/cmd/api-errors.go b/cmd/api-errors.go
index 79532f20e..89946cf43 100644
--- a/cmd/api-errors.go
+++ b/cmd/api-errors.go
@@ -187,6 +187,9 @@ const (
 	// new error codes here.
 
 	ErrMalformedJSON
+	ErrAdminNoSuchUser
+	ErrAdminNoSuchPolicy
+	ErrAdminInvalidArgument
 	ErrAdminInvalidAccessKey
 	ErrAdminInvalidSecretKey
 	ErrAdminConfigNoQuorum
@@ -864,6 +867,21 @@ var errorCodeResponse = map[APIErrorCode]APIError{
 		Description:    "The JSON you provided was not well-formed or did not validate against our published format.",
 		HTTPStatusCode: http.StatusBadRequest,
 	},
+	ErrAdminNoSuchUser: {
+		Code:           "XMinioAdminNoSuchUser",
+		Description:    "The specified user does not exist.",
+		HTTPStatusCode: http.StatusNotFound,
+	},
+	ErrAdminNoSuchPolicy: {
+		Code:           "XMinioAdminNoSuchPolicy",
+		Description:    "The canned policy does not exist.",
+		HTTPStatusCode: http.StatusNotFound,
+	},
+	ErrAdminInvalidArgument: {
+		Code:           "XMinioAdminInvalidArgument",
+		Description:    "Invalid arguments specified.",
+		HTTPStatusCode: http.StatusBadRequest,
+	},
 	ErrAdminInvalidAccessKey: {
 		Code:           "XMinioAdminInvalidAccessKey",
 		Description:    "The access key is invalid.",
@@ -1428,6 +1446,12 @@ func toAPIErrorCode(err error) (apiErr APIErrorCode) {
 
 	// Verify if the underlying error is signature mismatch.
 	switch err {
+	case errInvalidArgument:
+		apiErr = ErrAdminInvalidArgument
+	case errNoSuchUser:
+		apiErr = ErrAdminNoSuchUser
+	case errNoSuchPolicy:
+		apiErr = ErrAdminNoSuchPolicy
 	case errSignatureMismatch:
 		apiErr = ErrSignatureDoesNotMatch
 	case errInvalidRange:
diff --git a/cmd/iam.go b/cmd/iam.go
index 738b7f7e9..066f8a868 100644
--- a/cmd/iam.go
+++ b/cmd/iam.go
@@ -39,6 +39,9 @@ const (
 	// IAM users directory.
 	iamConfigUsersPrefix = iamConfigPrefix + "/users/"
 
+	// IAM policies directory.
+	iamConfigPoliciesPrefix = iamConfigPrefix + "/policies/"
+
 	// IAM sts directory.
 	iamConfigSTSPrefix = iamConfigPrefix + "/sts/"
 
@@ -52,8 +55,9 @@ const (
 // IAMSys - config system.
 type IAMSys struct {
 	sync.RWMutex
-	iamUsersMap  map[string]auth.Credentials
-	iamPolicyMap map[string]iampolicy.Policy
+	iamUsersMap        map[string]auth.Credentials
+	iamPolicyMap       map[string]string
+	iamCannedPolicyMap map[string]iampolicy.Policy
 }
 
 // Load - load iam.json
@@ -109,87 +113,19 @@ func (sys *IAMSys) Init(objAPI ObjectLayer) error {
 	}
 }
 
-// SetPolicy - sets policy to given user name.  If policy is empty,
-// existing policy is removed.
-func (sys *IAMSys) SetPolicy(accessKey string, p iampolicy.Policy) error {
+// DeleteCannedPolicy - deletes a canned policy.
+func (sys *IAMSys) DeleteCannedPolicy(policyName string) error {
 	objectAPI := newObjectLayerFn()
 	if objectAPI == nil {
 		return errServerNotInitialized
 	}
 
-	configFile := pathJoin(iamConfigUsersPrefix, accessKey, iamPolicyFile)
-	data, err := json.Marshal(p)
-	if err != nil {
-		return err
-	}
-
-	if globalEtcdClient != nil {
-		if err = saveConfigEtcd(context.Background(), globalEtcdClient, configFile, data); err != nil {
-			return err
-		}
-	} else {
-		if err = saveConfig(context.Background(), objectAPI, configFile, data); err != nil {
-			return err
-		}
-	}
-
-	sys.Lock()
-	defer sys.Unlock()
-
-	if p.IsEmpty() {
-		delete(sys.iamPolicyMap, accessKey)
-	} else {
-		sys.iamPolicyMap[accessKey] = p
-	}
-
-	return nil
-}
-
-// SaveTempPolicy - this is used for temporary credentials only.
-func (sys *IAMSys) SaveTempPolicy(accessKey string, p iampolicy.Policy) error {
-	objectAPI := newObjectLayerFn()
-	if objectAPI == nil {
-		return errServerNotInitialized
-	}
-
-	configFile := pathJoin(iamConfigSTSPrefix, accessKey, iamPolicyFile)
-	data, err := json.Marshal(p)
-	if err != nil {
-		return err
-	}
-
-	if globalEtcdClient != nil {
-		if err = saveConfigEtcd(context.Background(), globalEtcdClient, configFile, data); err != nil {
-			return err
-		}
-	} else {
-		if err = saveConfig(context.Background(), objectAPI, configFile, data); err != nil {
-			return err
-		}
-	}
-
-	sys.Lock()
-	defer sys.Unlock()
-
-	if p.IsEmpty() {
-		delete(sys.iamPolicyMap, accessKey)
-	} else {
-		sys.iamPolicyMap[accessKey] = p
-	}
-
-	return nil
-}
-
-// DeletePolicy - sets policy to given user name.  If policy is empty,
-// existing policy is removed.
-func (sys *IAMSys) DeletePolicy(accessKey string) error {
-	objectAPI := newObjectLayerFn()
-	if objectAPI == nil {
-		return errServerNotInitialized
+	if policyName == "" {
+		return errInvalidArgument
 	}
 
 	var err error
-	configFile := pathJoin(iamConfigUsersPrefix, accessKey, iamPolicyFile)
+	configFile := pathJoin(iamConfigPoliciesPrefix, policyName, iamPolicyFile)
 	if globalEtcdClient != nil {
 		err = deleteConfigEtcd(context.Background(), globalEtcdClient, configFile)
 	} else {
@@ -199,11 +135,104 @@ func (sys *IAMSys) DeletePolicy(accessKey string) error {
 	sys.Lock()
 	defer sys.Unlock()
 
-	delete(sys.iamPolicyMap, accessKey)
-
+	delete(sys.iamCannedPolicyMap, policyName)
 	return err
 }
 
+// ListCannedPolicies - lists all canned policies.
+func (sys *IAMSys) ListCannedPolicies() (map[string][]byte, error) {
+	objectAPI := newObjectLayerFn()
+	if objectAPI == nil {
+		return nil, errServerNotInitialized
+	}
+
+	var cannedPolicyMap = make(map[string][]byte)
+
+	sys.RLock()
+	defer sys.RUnlock()
+
+	for k, v := range sys.iamCannedPolicyMap {
+		data, err := json.Marshal(v)
+		if err != nil {
+			return nil, err
+		}
+		cannedPolicyMap[k] = data
+	}
+
+	return cannedPolicyMap, nil
+}
+
+// SetCannedPolicy - sets a new canned policy.
+func (sys *IAMSys) SetCannedPolicy(policyName string, p iampolicy.Policy) error {
+	objectAPI := newObjectLayerFn()
+	if objectAPI == nil {
+		return errServerNotInitialized
+	}
+
+	if p.IsEmpty() || policyName == "" {
+		return errInvalidArgument
+	}
+
+	configFile := pathJoin(iamConfigPoliciesPrefix, policyName, iamPolicyFile)
+	data, err := json.Marshal(p)
+	if err != nil {
+		return err
+	}
+
+	if globalEtcdClient != nil {
+		err = saveConfigEtcd(context.Background(), globalEtcdClient, configFile, data)
+	} else {
+		err = saveConfig(context.Background(), objectAPI, configFile, data)
+	}
+	if err != nil {
+		return err
+	}
+
+	sys.Lock()
+	defer sys.Unlock()
+
+	sys.iamCannedPolicyMap[policyName] = p
+
+	return nil
+}
+
+// SetUserPolicy - sets policy to given user name.
+func (sys *IAMSys) SetUserPolicy(accessKey, policyName string) error {
+	objectAPI := newObjectLayerFn()
+	if objectAPI == nil {
+		return errServerNotInitialized
+	}
+
+	sys.Lock()
+	defer sys.Unlock()
+
+	if _, ok := sys.iamUsersMap[accessKey]; !ok {
+		return errNoSuchUser
+	}
+
+	if _, ok := sys.iamCannedPolicyMap[policyName]; !ok {
+		return errNoSuchPolicy
+	}
+
+	data, err := json.Marshal(policyName)
+	if err != nil {
+		return err
+	}
+
+	configFile := pathJoin(iamConfigUsersPrefix, accessKey, iamPolicyFile)
+	if globalEtcdClient != nil {
+		err = saveConfigEtcd(context.Background(), globalEtcdClient, configFile, data)
+	} else {
+		err = saveConfig(context.Background(), objectAPI, configFile, data)
+	}
+	if err != nil {
+		return err
+	}
+
+	sys.iamPolicyMap[accessKey] = policyName
+	return nil
+}
+
 // DeleteUser - set user credentials.
 func (sys *IAMSys) DeleteUser(accessKey string) error {
 	objectAPI := newObjectLayerFn()
@@ -212,17 +241,30 @@ func (sys *IAMSys) DeleteUser(accessKey string) error {
 	}
 
 	var err error
-	configFile := pathJoin(iamConfigUsersPrefix, accessKey, iamPolicyFile)
+	pFile := pathJoin(iamConfigUsersPrefix, accessKey, iamPolicyFile)
+	iFile := pathJoin(iamConfigUsersPrefix, accessKey, iamIdentityFile)
 	if globalEtcdClient != nil {
-		err = deleteConfigEtcd(context.Background(), globalEtcdClient, configFile)
+		// It is okay to ingnore errors when deleting policy.json for the user.
+		_ = deleteConfigEtcd(context.Background(), globalEtcdClient, pFile)
+		err = deleteConfigEtcd(context.Background(), globalEtcdClient, iFile)
 	} else {
-		err = deleteConfig(context.Background(), objectAPI, configFile)
+		// It is okay to ingnore errors when deleting policy.json for the user.
+		_ = deleteConfig(context.Background(), objectAPI, pFile)
+		err = deleteConfig(context.Background(), objectAPI, iFile)
+	}
+
+	//
+	switch err.(type) {
+	case ObjectNotFound:
+		err = errNoSuchUser
 	}
 
 	sys.Lock()
 	defer sys.Unlock()
 
 	delete(sys.iamUsersMap, accessKey)
+	delete(sys.iamPolicyMap, accessKey)
+
 	return err
 }
 
@@ -240,13 +282,13 @@ func (sys *IAMSys) SetTempUser(accessKey string, cred auth.Credentials) error {
 	}
 
 	if globalEtcdClient != nil {
-		if err = saveConfigEtcd(context.Background(), globalEtcdClient, configFile, data); err != nil {
-			return err
-		}
+		err = saveConfigEtcd(context.Background(), globalEtcdClient, configFile, data)
 	} else {
-		if err = saveConfig(context.Background(), objectAPI, configFile, data); err != nil {
-			return err
-		}
+		err = saveConfig(context.Background(), objectAPI, configFile, data)
+	}
+
+	if err != nil {
+		return err
 	}
 
 	sys.Lock()
@@ -270,7 +312,8 @@ func (sys *IAMSys) ListUsers() (map[string]madmin.UserInfo, error) {
 
 	for k, v := range sys.iamUsersMap {
 		users[k] = madmin.UserInfo{
-			Status: madmin.AccountStatus(v.Status),
+			PolicyName: sys.iamPolicyMap[k],
+			Status:     madmin.AccountStatus(v.Status),
 		}
 	}
 
@@ -291,13 +334,13 @@ func (sys *IAMSys) SetUser(accessKey string, uinfo madmin.UserInfo) error {
 	}
 
 	if globalEtcdClient != nil {
-		if err = saveConfigEtcd(context.Background(), globalEtcdClient, configFile, data); err != nil {
-			return err
-		}
+		err = saveConfigEtcd(context.Background(), globalEtcdClient, configFile, data)
 	} else {
-		if err = saveConfig(context.Background(), objectAPI, configFile, data); err != nil {
-			return err
-		}
+		err = saveConfig(context.Background(), objectAPI, configFile, data)
+	}
+
+	if err != nil {
+		return err
 	}
 
 	sys.Lock()
@@ -332,8 +375,9 @@ func (sys *IAMSys) IsAllowed(args iampolicy.Args) bool {
 	}
 
 	// If policy is available for given user, check the policy.
-	if p, found := sys.iamPolicyMap[args.AccountName]; found {
-		return p.IsAllowed(args)
+	if name, found := sys.iamPolicyMap[args.AccountName]; found {
+		p, ok := sys.iamCannedPolicyMap[name]
+		return ok && p.IsAllowed(args)
 	}
 
 	// As policy is not available and OPA is not configured, return the owner value.
@@ -343,7 +387,7 @@ func (sys *IAMSys) IsAllowed(args iampolicy.Args) bool {
 var defaultContextTimeout = 5 * time.Minute
 
 // Similar to reloadUsers but updates users, policies maps from etcd server,
-func reloadEtcdUsers(prefix string, usersMap map[string]auth.Credentials, policyMap map[string]iampolicy.Policy) error {
+func reloadEtcdUsers(prefix string, usersMap map[string]auth.Credentials, policyMap map[string]string) error {
 	ctx, cancel := context.WithTimeout(context.Background(), defaultContextTimeout)
 	r, err := globalEtcdClient.Get(ctx, prefix, etcd.WithPrefix(), etcd.WithKeysOnly())
 	defer cancel()
@@ -400,18 +444,92 @@ func reloadEtcdUsers(prefix string, usersMap map[string]auth.Credentials, policy
 			usersMap[cred.AccessKey] = cred
 		}
 		if perr == nil {
-			var p iampolicy.Policy
-			if err = json.Unmarshal(pdata, &p); err != nil {
+			var policyName string
+			if err = json.Unmarshal(pdata, &policyName); err != nil {
 				return err
 			}
-			policyMap[path.Base(prefix)] = p
+			policyMap[path.Base(prefix)] = policyName
 		}
 	}
 	return nil
 }
 
+func reloadEtcdPolicies(prefix string, cannedPolicyMap map[string]iampolicy.Policy) error {
+	ctx, cancel := context.WithTimeout(context.Background(), defaultContextTimeout)
+	r, err := globalEtcdClient.Get(ctx, prefix, etcd.WithPrefix(), etcd.WithKeysOnly())
+	defer cancel()
+	if err != nil {
+		return err
+	}
+	// No users are created yet.
+	if r.Count == 0 {
+		return nil
+	}
+
+	policies := set.NewStringSet()
+	for _, kv := range r.Kvs {
+		// Extract policy by stripping off the `prefix` value as suffix,
+		// then strip off the remaining basename to obtain the prefix
+		// value, usually in the following form.
+		//
+		//  key := "config/iam/policys/newpolicy/identity.json"
+		//  prefix := "config/iam/policys/"
+		//  v := trim(trim(key, prefix), base(key)) == "newpolicy"
+		//
+		policyName := strings.TrimSuffix(strings.TrimSuffix(string(kv.Key), prefix), path.Base(string(kv.Key)))
+		if !policies.Contains(policyName) {
+			policies.Add(policyName)
+		}
+	}
+
+	// Reload config and policies for all policys.
+	for _, policyName := range policies.ToSlice() {
+		pFile := pathJoin(prefix, policyName, iamPolicyFile)
+		pdata, perr := readConfigEtcd(ctx, globalEtcdClient, pFile)
+		if perr != nil {
+			return perr
+		}
+		var p iampolicy.Policy
+		if err = json.Unmarshal(pdata, &p); err != nil {
+			return err
+		}
+		cannedPolicyMap[path.Base(prefix)] = p
+	}
+	return nil
+}
+
+func reloadPolicies(objectAPI ObjectLayer, prefix string, cannedPolicyMap map[string]iampolicy.Policy) error {
+	marker := ""
+	for {
+		var lo ListObjectsInfo
+		var err error
+		lo, err = objectAPI.ListObjects(context.Background(), minioMetaBucket, prefix, marker, "/", 1000)
+		if err != nil {
+			return err
+		}
+		marker = lo.NextMarker
+		for _, prefix := range lo.Prefixes {
+			pFile := pathJoin(prefix, iamPolicyFile)
+			pdata, perr := readConfig(context.Background(), objectAPI, pFile)
+			if perr != nil {
+				return perr
+			}
+			var p iampolicy.Policy
+			if err = json.Unmarshal(pdata, &p); err != nil {
+				return err
+			}
+			cannedPolicyMap[path.Base(prefix)] = p
+		}
+		if !lo.IsTruncated {
+			break
+		}
+	}
+	return nil
+
+}
+
 // reloadUsers reads an updates users, policies from object layer into user and policy maps.
-func reloadUsers(objectAPI ObjectLayer, prefix string, usersMap map[string]auth.Credentials, policyMap map[string]iampolicy.Policy) error {
+func reloadUsers(objectAPI ObjectLayer, prefix string, usersMap map[string]auth.Credentials, policyMap map[string]string) error {
 	marker := ""
 	for {
 		var lo ListObjectsInfo
@@ -451,11 +569,11 @@ func reloadUsers(objectAPI ObjectLayer, prefix string, usersMap map[string]auth.
 				usersMap[cred.AccessKey] = cred
 			}
 			if perr == nil {
-				var p iampolicy.Policy
-				if err = json.Unmarshal(pdata, &p); err != nil {
+				var policyName string
+				if err = json.Unmarshal(pdata, &policyName); err != nil {
 					return err
 				}
-				policyMap[path.Base(prefix)] = p
+				policyMap[path.Base(prefix)] = policyName
 			}
 		}
 		if !lo.IsTruncated {
@@ -468,9 +586,13 @@ func reloadUsers(objectAPI ObjectLayer, prefix string, usersMap map[string]auth.
 // Refresh IAMSys.
 func (sys *IAMSys) refresh(objAPI ObjectLayer) error {
 	iamUsersMap := make(map[string]auth.Credentials)
-	iamPolicyMap := make(map[string]iampolicy.Policy)
+	iamPolicyMap := make(map[string]string)
+	iamCannedPolicyMap := make(map[string]iampolicy.Policy)
 
 	if globalEtcdClient != nil {
+		if err := reloadEtcdPolicies(iamConfigPoliciesPrefix, iamCannedPolicyMap); err != nil {
+			return err
+		}
 		if err := reloadEtcdUsers(iamConfigUsersPrefix, iamUsersMap, iamPolicyMap); err != nil {
 			return err
 		}
@@ -478,6 +600,9 @@ func (sys *IAMSys) refresh(objAPI ObjectLayer) error {
 			return err
 		}
 	} else {
+		if err := reloadPolicies(objAPI, iamConfigPoliciesPrefix, iamCannedPolicyMap); err != nil {
+			return err
+		}
 		if err := reloadUsers(objAPI, iamConfigUsersPrefix, iamUsersMap, iamPolicyMap); err != nil {
 			return err
 		}
@@ -491,6 +616,7 @@ func (sys *IAMSys) refresh(objAPI ObjectLayer) error {
 
 	sys.iamUsersMap = iamUsersMap
 	sys.iamPolicyMap = iamPolicyMap
+	sys.iamCannedPolicyMap = iamCannedPolicyMap
 
 	return nil
 }
@@ -498,7 +624,8 @@ func (sys *IAMSys) refresh(objAPI ObjectLayer) error {
 // NewIAMSys - creates new config system object.
 func NewIAMSys() *IAMSys {
 	return &IAMSys{
-		iamUsersMap:  make(map[string]auth.Credentials),
-		iamPolicyMap: make(map[string]iampolicy.Policy),
+		iamUsersMap:        make(map[string]auth.Credentials),
+		iamPolicyMap:       make(map[string]string),
+		iamCannedPolicyMap: make(map[string]iampolicy.Policy),
 	}
 }
diff --git a/cmd/typed-errors.go b/cmd/typed-errors.go
index 6eb8c1b74..e1f9368dd 100644
--- a/cmd/typed-errors.go
+++ b/cmd/typed-errors.go
@@ -76,3 +76,9 @@ var errBucketAlreadyExists = errors.New("Your previous request to create the nam
 
 // error returned for a negative actual size.
 var errInvalidDecompressedSize = errors.New("Invalid Decompressed Size")
+
+// error returned in IAM subsystem when user doesn't exist.
+var errNoSuchUser = errors.New("Specified user does not exist")
+
+// error returned in IAM subsystem when policy doesn't exist.
+var errNoSuchPolicy = errors.New("Specified canned policy does not exist")
diff --git a/docs/multi-user/README.md b/docs/multi-user/README.md
index 365480d6c..bb13d74ab 100644
--- a/docs/multi-user/README.md
+++ b/docs/multi-user/README.md
@@ -9,13 +9,9 @@ In this document we will explain in detail on how to configure multiple users.
 - Install Minio - [Minio Quickstart Guide](https://docs.minio.io/docs/minio-quickstart-guide)
 
 ### 2. Create a new user and policy
-Create a new user `newuser` on Minio use `mc admin users`, with a `newuser.json`.
-```
-mc admin users add myminio newuser newuser123 /tmp/newuser.json
-```
-
-An example user policy, enables `newuser` to download all objects in my-bucketname.
+Create new canned policy `getonly` with `newuser.json` use `mc admin policies`. This policy enables users to download all objects in my-bucketname.
 ```json
+cat > getonly.json << EOF
 {
   "Version": "2012-10-17",
   "Statement": [
@@ -31,6 +27,14 @@ An example user policy, enables `newuser` to download all objects in my-bucketna
     }
   ]
 }
+EOF
+
+mc admin policies add myminio getonly getonly.json
+```
+
+Create a new user `newuser` on Minio use `mc admin users`, additionally specify `getonly` canned policy for this `newuser`.
+```
+mc admin users add myminio newuser newuser123 getonly
 ```
 
 ### 3. Revoke user
diff --git a/pkg/madmin/API.md b/pkg/madmin/API.md
index 94ef5481a..75469df5c 100644
--- a/pkg/madmin/API.md
+++ b/pkg/madmin/API.md
@@ -38,10 +38,10 @@ func main() {
 
 | Service operations         | Info operations  | Healing operations                    | Config operations        | IAM operations | Misc                                |
 |:----------------------------|:----------------------------|:--------------------------------------|:--------------------------|:------------------------------------|:------------------------------------|
-| [`ServiceStatus`](#ServiceStatus) | [`ServerInfo`](#ServerInfo) | [`Heal`](#Heal) | [`GetConfig`](#GetConfig) | [`AddUser()`](#AddUser) | [`SetAdminCredentials`](#SetAdminCredentials) |
-| [`ServiceSendAction`](#ServiceSendAction) | | | [`SetConfig`](#SetConfig) | [`AddUserPolicy`](#AddUserPolicy) | [`StartProfiling`](#StartProfiling) |
+| [`ServiceStatus`](#ServiceStatus) | [`ServerInfo`](#ServerInfo) | [`Heal`](#Heal) | [`GetConfig`](#GetConfig) | [`AddUser`](#AddUser) | [`SetAdminCredentials`](#SetAdminCredentials) |
+| [`ServiceSendAction`](#ServiceSendAction) | | | [`SetConfig`](#SetConfig) | [`SetUserPolicy`](#SetUserPolicy) | [`StartProfiling`](#StartProfiling) |
 | | |            | [`GetConfigKeys`](#GetConfigKeys) | [`ListUsers`](#ListUsers) | [`DownloadProfilingData`](#DownloadProfilingData) |
-| | |            | [`SetConfigKeys`](#SetConfigKeys) |                                     |
+| | |            | [`SetConfigKeys`](#SetConfigKeys) | [`AddCannedPolicy`](#AddCannedPolicy) | |
 
 
 ## 1. Constructor
@@ -349,6 +349,20 @@ __Example__
 
 ## 8. IAM operations
 
+<a name="AddCannedPolicy"></a>
+### AddCannedPolicy(policyName string, policy string) error
+Create a new canned policy on Minio server.
+
+__Example__
+
+```
+	policy := `{"Version": "2012-10-17","Statement": [{"Action": ["s3:GetObject"],"Effect": "Allow","Resource": ["arn:aws:s3:::my-bucketname/*"],"Sid": ""}]}`
+
+    if err = madmClnt.AddCannedPolicy("get-only", policy); err != nil {
+		log.Fatalln(err)
+	}
+```
+
 <a name="AddUser"></a>
 ### AddUser(user string, secret string) error
 Add a new user on a Minio server.
@@ -361,16 +375,14 @@ __Example__
 	}
 ```
 
-<a name="AddUserPolicy"></a>
-### AddUserPolicy(user string, policy string) error
-Set a new policy for a given user on Minio server.
+<a name="SetUserPolicy"></a>
+### SetUserPolicy(user string, policyName string) error
+Enable a canned policy `get-only` for a given user on Minio server.
 
 __Example__
 
 ``` go
-	policy := `{"Version": "2012-10-17","Statement": [{"Action": ["s3:GetObject"],"Effect": "Allow","Resource": ["arn:aws:s3:::my-bucketname/*"],"Sid": ""}]}`
-
-	if err = madmClnt.AddUserPolicy("newuser", policy); err != nil {
+	if err = madmClnt.SetUserPolicy("newuser", "get-only"); err != nil {
 		log.Fatalln(err)
 	}
 ```
diff --git a/pkg/madmin/examples/add-user-and-policy.go b/pkg/madmin/examples/add-user-and-policy.go
index be0e50891..e0d2b2b20 100644
--- a/pkg/madmin/examples/add-user-and-policy.go
+++ b/pkg/madmin/examples/add-user-and-policy.go
@@ -46,7 +46,11 @@ func main() {
 	// Create policy
 	policy := `{"Version": "2012-10-17","Statement": [{"Action": ["s3:GetObject"],"Effect": "Allow","Resource": ["arn:aws:s3:::my-bucketname/*"],"Sid": ""}]}`
 
-	if err = madmClnt.AddUserPolicy("newuser", policy); err != nil {
+	if err = madmClnt.AddCannedPolicy("get-only", policy); err != nil {
+		log.Fatalln(err)
+	}
+
+	if err = madmClnt.SetUserPolicy("newuser", "get-only"); err != nil {
 		log.Fatalln(err)
 	}
 }
diff --git a/pkg/madmin/policy-commands.go b/pkg/madmin/policy-commands.go
new file mode 100644
index 000000000..210a994c7
--- /dev/null
+++ b/pkg/madmin/policy-commands.go
@@ -0,0 +1,107 @@
+/*
+ * Minio Cloud Storage, (C) 2018 Minio, Inc.
+ *
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ *     http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ *
+ */
+
+package madmin
+
+import (
+	"encoding/json"
+	"io/ioutil"
+	"net/http"
+	"net/url"
+)
+
+// ListCannedPolicies - list all configured canned policies.
+func (adm *AdminClient) ListCannedPolicies() (map[string][]byte, error) {
+	reqData := requestData{
+		relPath: "/v1/list-canned-policies",
+	}
+
+	// Execute GET on /minio/admin/v1/list-canned-policies
+	resp, err := adm.executeMethod("GET", reqData)
+
+	defer closeResponse(resp)
+	if err != nil {
+		return nil, err
+	}
+
+	if resp.StatusCode != http.StatusOK {
+		return nil, httpRespToErrorResponse(resp)
+	}
+
+	respBytes, err := ioutil.ReadAll(resp.Body)
+	if err != nil {
+		return nil, err
+	}
+
+	var policies = make(map[string][]byte)
+	if err = json.Unmarshal(respBytes, &policies); err != nil {
+		return nil, err
+	}
+
+	return policies, nil
+}
+
+// RemoveCannedPolicy - remove a policy for a canned.
+func (adm *AdminClient) RemoveCannedPolicy(policyName string) error {
+	queryValues := url.Values{}
+	queryValues.Set("name", policyName)
+
+	reqData := requestData{
+		relPath:     "/v1/remove-canned-policy",
+		queryValues: queryValues,
+	}
+
+	// Execute DELETE on /minio/admin/v1/remove-canned-policy to remove policy.
+	resp, err := adm.executeMethod("DELETE", reqData)
+
+	defer closeResponse(resp)
+	if err != nil {
+		return err
+	}
+
+	if resp.StatusCode != http.StatusOK {
+		return httpRespToErrorResponse(resp)
+	}
+
+	return nil
+}
+
+// AddCannedPolicy - adds a policy for a canned.
+func (adm *AdminClient) AddCannedPolicy(policyName, policy string) error {
+	queryValues := url.Values{}
+	queryValues.Set("name", policyName)
+
+	reqData := requestData{
+		relPath:     "/v1/add-canned-policy",
+		queryValues: queryValues,
+		content:     []byte(policy),
+	}
+
+	// Execute PUT on /minio/admin/v1/add-canned-policy to set policy.
+	resp, err := adm.executeMethod("PUT", reqData)
+
+	defer closeResponse(resp)
+	if err != nil {
+		return err
+	}
+
+	if resp.StatusCode != http.StatusOK {
+		return httpRespToErrorResponse(resp)
+	}
+
+	return nil
+}
diff --git a/pkg/madmin/user-commands.go b/pkg/madmin/user-commands.go
index a31df5193..e0337b709 100644
--- a/pkg/madmin/user-commands.go
+++ b/pkg/madmin/user-commands.go
@@ -34,8 +34,9 @@ const (
 
 // UserInfo carries information about long term users.
 type UserInfo struct {
-	SecretKey string        `json:"secretKey,omitempty"`
-	Status    AccountStatus `json:"status"`
+	SecretKey  string        `json:"secretKey,omitempty"`
+	PolicyName string        `json:"policyName,omitempty"`
+	Status     AccountStatus `json:"status"`
 }
 
 // RemoveUser - remove a user.
@@ -137,43 +138,18 @@ func (adm *AdminClient) AddUser(accessKey, secretKey string) error {
 	return adm.SetUser(accessKey, secretKey, AccountEnabled)
 }
 
-// RemoveUserPolicy - remove a policy for a user.
-func (adm *AdminClient) RemoveUserPolicy(accessKey string) error {
+// SetUserPolicy - adds a policy for a user.
+func (adm *AdminClient) SetUserPolicy(accessKey, policyName string) error {
 	queryValues := url.Values{}
 	queryValues.Set("accessKey", accessKey)
+	queryValues.Set("name", policyName)
 
 	reqData := requestData{
-		relPath:     "/v1/remove-user-policy",
+		relPath:     "/v1/set-user-policy",
 		queryValues: queryValues,
 	}
 
-	// Execute DELETE on /minio/admin/v1/remove-user-policy to remove policy.
-	resp, err := adm.executeMethod("DELETE", reqData)
-
-	defer closeResponse(resp)
-	if err != nil {
-		return err
-	}
-
-	if resp.StatusCode != http.StatusOK {
-		return httpRespToErrorResponse(resp)
-	}
-
-	return nil
-}
-
-// AddUserPolicy - adds a policy for a user.
-func (adm *AdminClient) AddUserPolicy(accessKey, policy string) error {
-	queryValues := url.Values{}
-	queryValues.Set("accessKey", accessKey)
-
-	reqData := requestData{
-		relPath:     "/v1/add-user-policy",
-		queryValues: queryValues,
-		content:     []byte(policy),
-	}
-
-	// Execute PUT on /minio/admin/v1/add-user-policy to set policy.
+	// Execute PUT on /minio/admin/v1/set-user-policy to set policy.
 	resp, err := adm.executeMethod("PUT", reqData)
 
 	defer closeResponse(resp)