Payment & Small Banks — Set 7
Banking · पेमेंट और स्मॉल बैंक · Questions 61–70 of 70
The main aim of Small Finance Banks is to provide financial inclusion to which group?
Correct Answer: D. Unserved and underserved sections like small farmers
SFBs were created to serve the 'bottom of the pyramid' including small and marginal farmers and micro-industries. They fill the gap where traditional banks might find it unprofitable to operate. This supports the broader national goal of financial inclusion.
Can a Payment Bank provide a loan to a small business?
Correct Answer: C. No, Payment Banks cannot provide any type of loan
A major restriction on Payment Banks is that they cannot undertake any lending activity. This means they cannot give loans or advances of any kind to anyone. This keeps their business model simple and virtually free of credit risk.
Which bank is the regulator for both Payment Banks and Small Finance Banks?
Correct Answer: A. Reserve Bank of India
The Reserve Bank of India (RBI) is the central authority that issues licenses and sets regulations for these banks. It ensures that they follow the banking laws of the country. RBI's supervision helps in maintaining the stability of the entire banking system.
Small Finance Banks must have at least _____ of their loans in the form of small-ticket loans up to Rs. 25 lakh.?
Correct Answer: C. 50%
To ensure they focus on small borrowers, SFBs are mandated to have 50% of their total loans in sizes of Rs. 25 lakh or less. This prevents them from only lending to large businesses. It is a core condition of their specialized banking license.
What is the maximum balance an individual can keep in a Payment Bank account at the end of the day?
Correct Answer: C. Rs. 2 lakh
Currently, the RBI allows a maximum balance of Rs. 2 lakh per individual customer in a Payment Bank. This was increased from the earlier limit of Rs. 1 lakh to help these banks grow. It encourages people to use these banks for more of their daily transactions.
Payment Banks are allowed to issue which type of cards to their customers?
Correct Answer: D. Debit Cards
Payment Banks can issue Debit cards (ATM cards) but are strictly not allowed to issue Credit cards. This is because issuing a credit card is a form of lending, which Payment Banks cannot do. Debit cards allow customers to access their own deposited money easily.
Which committee's report recommended the concept of differentiated banking in India?
Correct Answer: D. Nachiket Mor Committee
The Nachiket Mor Committee, formed in 2013, proposed the idea of Payment Banks and Small Finance Banks. The goal was to reach the millions of Indians who did not have access to formal banking. This led to a major shift in how the RBI issues new bank licenses.
At least what percentage of a Small Finance Bank's branches must be in unbanked rural areas?
Correct Answer: C. 25%
The RBI requires SFBs to open at least 25% of their branches in rural areas that currently have no bank branches. This rule ensures that these banks help in developing rural parts of the country. It is part of the 'Financial Inclusion' mission.
Small Finance Banks have a higher target for Priority Sector Lending (PSL). What is that target?
Correct Answer: A. 75% of loans
While normal banks have a 40% target, Small Finance Banks must give 75% of their total loans to priority sectors like agriculture and small business. This ensures that their lending helps the weaker sections of the economy. It is their primary duty as per the license rules.
Payment Banks must invest 75% of their deposits in?
Correct Answer: B. Government Securities (G-Secs)
To keep the depositors' money safe, Payment Banks are required to invest 75% of it in government bonds. These are considered the safest type of investment. The remaining 25% can be kept as deposits in other commercial banks.