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.
✓ Correct answer: b) 1 and 3 only
ExplanationStatement 1 is correct: The Reserve Bank of India’s guidelines for licensing Payments Banks specify that enti- ties such as existing non-bank Prepaid Payment Instrument (PPI) issuers, mobile telephone companies, supermarket chains, and others owned and controlled by residents are eligible to promote Payments Banks.This initiative aims to leverage their extensive customer bases and distribution net- works to enhance financial inclusion.Statement 2 is incorrect: Payments Banks are permitted to issue ATM or debit cards but are not allowed to issue credit cards.This restriction aligns with their mandate to provide basic banking services without engaging in credit risk activities.The restriction on credit cards is a key differentiator between Pay- ment Banks and traditional banks.Statement 3 is correct : As per RBI guidelines their primary role is to accept demand deposits, provide payment and remit- tance services, and distribute financial products like insurance and mutual funds, thereby promoting financial inclusion without assuming credit risk.177
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