The establishment of “Payment Banks’ is being allowed in India to promote Financial Inclusion. Which of the following statements is/are correct in this context?
- Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks.
- Payment Banks can issue both credit cards and debit cards.
- Payment Banks cannot undertake lending activities.
Select the correct answer using the code given below:
Detailed Explanation:
Answer: Option 2 — 1 and 3 only
✅ Statement 1 – Correct: Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks under RBI guidelines. This provision enables entities with extensive reach and distribution networks to promote financial inclusion among unbanked populations.
❌ Statement 2 – Incorrect: Payment Banks are permitted to issue only debit cards and ATM cards linked to their deposit accounts. They cannot issue credit cards as they are not authorized to undertake any lending activities, which is a prerequisite for credit card issuance.
✅ Statement 3 – Correct: Payment Banks are explicitly prohibited from undertaking lending activities under RBI regulations. They can only accept deposits (up to ₹2 lakh per customer) and provide payment/remittance services, thereby focusing solely on facilitating transactions and savings rather than credit creation.
Question 13 of 13 Digital Banking and Payment Systems
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