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Q4 (IAS/2016) Economy › Economy Current Affairs › Digital payments ecosystem Official Key

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.

Result
Your answer: —  Âˇ  Correct: B
Explanation

The correct answer is option B (statements 1 and 3 only).

Statement 1 is correct as mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks[2].

Statement 2 is incorrect. Payment Banks cannot issue credit cards but can issue debit cards[4]. They can issue ATM/Debit Cards for payments and remittance services[1].

Statement 3 is correct. Payment Banks cannot give depositor's money as loans[4], meaning they are not allowed to lend[5]. This restriction ensures they focus on their primary objective of providing low-cost payment and remittance services to promote financial inclusion among migrant laborers, self-employed individuals, and low-income households.

Therefore, only statements 1 and 3 are correct, making option B the right answer.

Sources
  1. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > Payments Banks > p. 190
  2. [2] https://ijirt.org/publishedpaper/IJIRT168218_PAPER.pdf
  3. [3] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > Payments Banks > p. 191
  4. [4] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > Payments Banks > p. 191
  5. [5] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 21. Payment Banks: > p. 87
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PROVENANCE & STUDY PATTERN
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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. The establishment of 'Payment Banks' is being allowed in India to promote financial inclusion. Which of the following statements is/are c…
At a glance
Origin: Books + Current Affairs Fairness: High fairness Books / CA: 8/10 ¡ 2/10
You're seeing a guest preview. The Verdict and first statement analysis are open. Login with Google to unlock all tabs.

This question defines the 'New Banking Structure' era (2014-2016). While it was Current Affairs then, it is now core Static Economy. The key to cracking such questions is focusing on the 'Negative List'—what a new entity is explicitly FORBIDDEN from doing (e.g., lending, credit cards).

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Are mobile telephone companies owned and controlled by residents eligible to be promoters of Payment Banks in India under RBI guidelines?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 7: Money and Banking > Payments Banks > p. 190
Presence: 5/5
“The guidelines for Payments Banks provide the following: • Eligible promoters can be non-bank Prepaid Payment Instrument (PPI) issuers and (i)other entities like mobile telephone companies, etc.• Shall primarily accept demand deposits up to maximum balance of \bar {\tau}1,00,000 per (ii)individual customer.• Can issue ATM/Debit Cards, payments and remittance services. (iii)• (iv) Maintain CRR with the RBI on its outside Demand and Time Liabilities and invest at least 75 per cent of its 'demand deposit balances' in SLR eligible G-Secs/Treasury Bills Examples of Payments Bank include India Post Payments Bank, Airtel Payments Bank, Paytm Payments Bank.”
Why this source?
  • The Payments Bank guidelines explicitly list 'other entities like mobile telephone companies' as eligible promoters.
  • The snippet names examples of Payments Banks (Airtel Payments Bank, Paytm Payments Bank), showing real-world application of mobile telecoms as promoters.
Statement analysis

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Statement analysis

This statement analysis shows book citations, web sources and indirect clues. The first statement (S1) is open for preview.

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Statement analysis

This statement analysis shows book citations, web sources and indirect clues. The first statement (S1) is open for preview.

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Statement analysis

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SIMILAR QUESTIONS

IAS ¡ 2017 ¡ Q79 Relevance score: 3.29

Consider the following statements : 1. National Payments Corporation of India (NPCI) helps in promoting the financial inclusion in the country. 2. NPCI has launched RuPay, a card payment scheme. Which of the statements given above is/are correct ?

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With reference to India, Consider the following: 1. Nationalization of Banks 2. Formation of Regional Rural Banks 3. Adoption of villages by Bank Branches Which of the above can be considered as steps taken to achieve the “financial inclusion” in India.

CDS-I ¡ 2018 ¡ Q55 Relevance score: 0.59

Which of the following statements about the India Post Payments Bank (IPPB) is/are correct? 1. It has been incorporated as a Public Limited Company. 2. It started its operation by establishing two pilot branches at Hyderabad and Varanasi. Select the correct answer using the code given below.

IAS ¡ 2003 ¡ Q96 Relevance score: 0.48

Consider the following statements: 1. The maximum limit of shareholding of Indian promoters in private sector banks in India is 49 per cent of the paid up capital. 2. Foreign Direct Investment up to 49 per cent from all sources is permitted in private sector banks in India under the automatic route. Which to these statements is/are correct?

IAS ¡ 2021 ¡ Q35 Relevance score: 0.15

With reference to 'Urban Cooperative Banks' in India, consider the following statements : 1. They are supervised and regulated by local boards set up by the State Governments. 2. They can issue equity shares and preference shares. 3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966. Which of the statements given above is/are correct?