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?
- 1.Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks.
- 2.Payment Banks can issue both credit cards and debit cards.
- 3.Payment Banks cannot undertake lending activities.
Select the correct answer using the code given below.
- A.1 and 2 only
- B.1 and 3 only
- C.2 only
- D.1, 2 and 3
▶ Answer & Explanation
Correct answer: B. 1 and 3 only
Payment Banks are a type of differentiated bank launched by the Reserve Bank of India (RBI) to further financial inclusion. They are allowed to accept deposits but cannot accept demand deposits; they can also issue debit cards. However, they are restricted from accepting time deposits and undertaking lending activities. Promoters such as mobile telephone companies and supermarket chains, if owned and controlled by residents, are eligible to set up payment banks, facilitating greater reach.
Source: UPSC gs1 2016