Hi Ankur,
> Is it doable by granting the restricted permissions?
>
No.
> Else another option would be to store the encrypted data but it would have a
> performance hit.
>
Yes.
That is your choice: either security or performance.
> Any pointers/suggestions would be much appreciated.
>
http://www.postgresql.org/docs/8.3/static/pgcrypto.html
Cheers,
Mike