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.
Answer: C
- 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.