Payment Banks and Payment Systems Questions and Answers

Answer: A

75 %. Money collected from depositors can be invested either in government bonds or can be deposited with other commercial banks.Every Payment Banks are required to invest 75 % of its demand deposit balance into government securities.

Answer: A

Correct answer: 11

The Reserve Bank granted in-principle approval to eleven applicants in August 2015, from a field of 41. The approvals were valid for eighteen months, within which each entity had to satisfy the conditions and obtain a final licence. Three of the eleven surrendered their approvals before doing so.

Answer: A

Correct answer: Rs 100 crore

The minimum paid-up equity capital is Rs 100 crore, of which the promoter must hold at least 40 per cent for the first five years. The bank must also maintain a capital adequacy ratio of 15 per cent of risk weighted assets on a continuing basis, which is above the ordinary requirement despite the far lower risk the assets carry.

Answer: C

Correct answer: ECS

Electronic Clearing Service in its debit variant collects from many accounts and pays into one - multiple debits, single credit - which is how a utility or an insurer collects periodic dues from thousands of customers. The credit variant is the reverse, single debit and multiple credits, used for salary and dividend payments. NEFT, RTGS and UPI are all single debit, single credit transfers.

Answer: A

Correct answer: New Delhi

India Post Payments Bank, launched in September 2018, is headquartered in New Delhi and is wholly owned by the Government of India through the Department of Posts. It has by far the largest reach of any payments bank, since it works through the post office network of more than 150,000 offices, most of them rural.

Answer: B

Correct answer: 200000

The limit was raised from Rs 1 lakh to Rs 2 lakh with effect from April 2021, so older material still quotes the earlier figure.

A payments bank may hold up to Rs 2 lakh per individual customer at the end of any day. The cap exists because the bank is intended for small savers and for payments rather than as a general deposit-taking institution, and it is applied per customer rather than per account.

Answer: C

Nachiket Mor Committee. In Sept 2013, RBI has formed a committee on Comprehensive Financial Services for Small Businesses and Low Income Households headed by Nachiket Mor. In January 2014, the Committee has submitted its report with recommendation to form a new category of Bank Called Payment Banks.

Answer: C

Correct answer: Both a and b

A payments bank may open both savings and current accounts, subject to the balance cap per customer. What it may not do is lend against them, offer a credit card, or accept deposits from non-resident Indians. Current accounts matter to the model because small merchants are among the customers the licence was designed to reach.

Answer: B

Correct answer: 11

Eleven entities received in-principle approval in August 2015 from 41 applications. The successful group was dominated by telecom operators and payment companies - Airtel, Vodafone, Reliance, Aditya Birla Nuvo, Paytm, Fino, Department of Posts and others - reflecting that distribution reach, rather than banking experience, was the capability the model required.