Payments Bank - GS questions based on daily current affairs

1)   Which of the following statements is/are correct about Payment bank?

1. Payment bank will have to keep CRR (Cash reserve ratio) just like other Scheduled commercial banks.
2. The highest balance a bank can hold per customer Rs 50,000.

a. Only 1
b. Only 2
c. Both
d. None
Answer  Explanation 

ANSWER: Only 1

Explanation:
- The highest balance a bank can hold per customer is Rs 1 lakh, against the Mor panel’s recommendation of Rs 50,000.
- While payment banks won’t have to have a quarter of their branches in un-banked rural areas (as applicable for existing banks), they should have at least 25 per cent of their access points in such areas.
- The minimum paid-up capital required for both categories would be Rs 100 crore, of which the promoter would have to contribute at least 40 percent initially, with a five-year lock-in period.
- They would also have to maintain a capital adequacy ratio of 15 percent, though under Basel-I norms.
- If promoter shareholding exceeds 40 percent, it has to be cut to this level within three years of operations, 30 percent within 10 years and 26 percent within 13 years.
2)   Which of the following statements is/are correct about Payments Bank?

1. The Reserve Bank of India (RBI) recently gave a license to India Post to function as a payments bank.
2. Payment banks allow mobile firms, supermarket chains, and others to cater to individuals and small businesses.

a. Only 1
b. Only 2
c. Both
d. None of the above
Answer  Explanation 

ANSWER: Both

Explanation:
- The Payments Bank will be set up as a differentiated bank and shall confine its activities to acceptance of demand deposits, remittance services, Internet banking and other specified services.
- Payments Banks will initially be restricted to holding a maximum balance of Rs. 1 lakh per individual customer.
- They will be allowed to issue ATM/debit cards as also other prepaid payment instruments, but not the credit cards.
- These banks can also distribute non-risk sharing simple financial products like mutual funds and insurance products.
- They will not be allowed to undertake lending services and non resident Indians will not be allowed to open accounts.
3)   Consider the following statements

1. A payments bank will not be allowed to lend and will invest 75 percent of funds in government securities.
2. Its main focus is to offer remittance services and simple financial products.
3. The minimum capital requirement is set at Rs 100 crore.
4. It will be allowed to accept savings deposits up to Rs 1 lakh a customer.

Which of the above statements is/are correct?

a. 1,2,3
b. 2,3
c. 1,3,4
d. All
Answer  Explanation 

ANSWER: All

Explanation:
No explanation is available for this question!

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