Payment & Small Banks — Set 5
Banking · पेमेंट और स्मॉल बैंक · Questions 41–50 of 70
What happens to the voting rights of a shareholder in a Payment Bank who holds more than 10% stake?
Correct Answer: C. Capped at 10% as per Banking Regulation Act
As per the Banking Regulation Act, the voting rights of any individual shareholder are capped at 10% to prevent concentrated control. This limit can be gradually raised to 26% with specific RBI approval. It ensures democratic and diversified control over the bank's management.
Small Finance Banks are categorized under which schedule of the RBI Act, 1934?
Correct Answer: A. Second Schedule
SFBs become 'Scheduled Banks' once they are included in the Second Schedule of the RBI Act. This status allows them to borrow from the RBI for liquidity needs. It also increases the trust of the general public in the institution.
Which company serves as the parent/promoter for Paytm Payments Bank?
Correct Answer: A. One97 Communications
One97 Communications is the parent company that launched Paytm and subsequently the Paytm Payments Bank. The bank was founded by Vijay Shekhar Sharma. It was one of the largest players in the digital payment space in India.
Small Finance Banks are not permitted to undertake which of the following?
Correct Answer: D. Setting up of subsidiaries
Small Finance Banks are generally not allowed to set up subsidiaries to prevent complex corporate structures. They are expected to focus on their primary business of credit and savings for small users. Any deviation from this requires specific prior approval from the RBI.
What is the maximum balance a Payment Bank can hold in a customer's account as per RBI guidelines?
Correct Answer: C. Rs. 2,00,000
As per revised RBI guidelines, a Payment Bank can hold a maximum balance of Rs. 2,00,000 (two lakh rupees) per individual customer account at the end of the day. This limit was increased from the initial Rs. 1,00,000 to Rs. 2,00,000 to make Payment Banks more useful for customers. Payment Banks cannot issue credit cards or extend loans. They can accept demand deposits, issue debit cards, provide internet banking, and distribute third-party products like insurance and mutual funds as agents.
What is the maximum limit for a 'Small Business' loan in an SFB to be considered under the 50% low-ticket size mandate?
Correct Answer: B. Rs. 25 lakh
Loans up to Rs. 25 lakh are considered small-ticket loans for the purpose of the 50% portfolio requirement. This ensures that the bank's lending reaches a large number of small borrowers. This is a core regulatory requirement to maintain the SFB status.
Which Payment Bank is known for having a significant number of its points at neighborhood kirana stores?
Correct Answer: A. Fino Payments Bank
Fino Payments Bank has built its model around local merchant points, often called Fino Points. It focuses on the domestic remittance market for the migrant population. This 'phygital' model combines physical presence with digital ease.
Which of the following is true regarding the listing requirements for Small Finance Banks?
Correct Answer: C. Mandatory within 3 years of reaching a net worth of Rs. 500 crore
SFBs must get their shares listed on a stock exchange within three years of their net worth reaching Rs. 500 crore. This is to ensure public accountability and provide an exit route for initial investors. Many SFBs have already listed through successful Initial Public Offerings (IPOs).
Payment Banks are prohibited from participating in which market?
Correct Answer: B. Lending to big Corporates
Payment Banks are strictly forbidden from lending to any entity, especially big corporates. They can participate in the call money market for their own liquidity management. Their asset side is mostly composed of safe government bonds.
Which differentiated bank is best suited to provide credit to small and marginal farmers?
Correct Answer: C. Small Finance Bank
Small Finance Banks are designed to meet the credit needs of small and marginal farmers through their priority sector lending mandate. Payment Banks cannot provide credit and hence cannot issue farm loans. SFBs fill the gap left by universal banks in rural credit delivery.