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.
Show answer
Answer: B. Statement 1 is correct: RBI's 2014 guidelines allowed resident-controlled entities such as mobile phone companies and supermarket chains to promote Payment Banks. Statement 2 is wrong: they can issue debit cards but not credit cards. Statement 3 is correct: they cannot lend. So 1 and 3.
Watch for: Being allowed to issue debit cards tempts students to assume credit cards are allowed too.
Why the other options are wrong
- A. Wrong because Payment Banks cannot issue credit cards.
- C. Wrong because Payment Banks cannot issue credit cards, and 1 is also correct.
- D. Wrong because Statement 2 is false; no credit cards are allowed.
Source to check: RBI, 'Guidelines for Licensing of Payments Banks', 27 November 2014 (rbi.org.in)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.