Q32) Consider the following statements about Payment Banks.
i) Payments banks will mainly deal in remittance services and accept deposits of up to Rs 1 lakh.
ii) They will not lend to customers and will have to deploy their funds in government papers and bank deposits.
iii) They can issuedebit cards and credit cards.
Which of the above statements is/are correct?
Q32) Consider the following statements about Payment Banks.
i) Payments banks will mainly deal in remittance services and accept deposits of up to Rs 1 lakh.
ii) They will not lend to customers and will have to deploy their funds in government papers and bank deposits.
iii) They can issuedebit cards and credit cards.
Which of the above statements is/are correct?
The correct option is A a) i and ii only
Ans: A
Explanation: A payments bank is like any other bank, but operating on a smaller scale without involving any credit risk. In simple words, it can carry out most banking operations but can't advance loans or issue credit cards. It can accept demand deposits (up to Rs 1 lakh), offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third party fund transfers.
In September 2013, the Reserve Bank of India constituted a committee headed by Dr NachiketMor to study 'Comprehensive financial services for small businesses and low income households'. The objective of the committee was to propose measures for achieving financial inclusion and increased access to financial services.
The committee submitted its report to RBI in January 2014. One of the key suggestions of the committee was to introduce specialised banks or 'payments bank' to cater to the lower income groups and small businesses so that by January 1, 2016 each Indian resident can have a global bank account.
In February 2015, RBI released the list of entities which had applied for a payments bank licence. There were 41 applicants. It was also announced that an external advisory committee (EAC) headed by NachiketMor would evaluate the licence applications. On 28 February 2015, during the presentation of the Budget it was announced that India Post will use its large network to run payments bank. The external advisory committee headed by NachiketMor submitted its findings on 6 July 2015. The applicant entities were examined for their financial track record and governance issues. On 19 August 2015, the Reserve Bank of India gave "in-principle" licences to eleven entities to launch payments banks:
1. Aditya Birla Nuvo
2. Airtel M Commerce Services
3. Cholamandalam Distribution Services
4. Department of Posts
5. FINO PayTech
6. National Securities Depository
7. Reliance Industries
8. Sun Pharmaceuticals
9. Paytm
10. Tech Mahindra
11. Vodafone M-Pesa
a) i and ii only
Ans: A
Explanation: A payments bank is like any other bank, but operating on a smaller scale without involving any credit risk. In simple words, it can carry out most banking operations but can't advance loans or issue credit cards. It can accept demand deposits (up to Rs 1 lakh), offer remittance services, mobile payments/transfers/purchases and other banking services like ATM/debit cards, net banking and third party fund transfers.
In September 2013, the Reserve Bank of India constituted a committee headed by Dr NachiketMor to study 'Comprehensive financial services for small businesses and low income households'. The objective of the committee was to propose measures for achieving financial inclusion and increased access to financial services.
The committee submitted its report to RBI in January 2014. One of the key suggestions of the committee was to introduce specialised banks or 'payments bank' to cater to the lower income groups and small businesses so that by January 1, 2016 each Indian resident can have a global bank account.
In February 2015, RBI released the list of entities which had applied for a payments bank licence. There were 41 applicants. It was also announced that an external advisory committee (EAC) headed by NachiketMor would evaluate the licence applications. On 28 February 2015, during the presentation of the Budget it was announced that India Post will use its large network to run payments bank. The external advisory committee headed by NachiketMor submitted its findings on 6 July 2015. The applicant entities were examined for their financial track record and governance issues. On 19 August 2015, the Reserve Bank of India gave "in-principle" licences to eleven entities to launch payments banks:
1. Aditya Birla Nuvo
2. Airtel M Commerce Services
3. Cholamandalam Distribution Services
4. Department of Posts
5. FINO PayTech
6. National Securities Depository
7. Reliance Industries
8. Sun Pharmaceuticals
9. Paytm
10. Tech Mahindra
11. Vodafone M-Pesa
