Banking Awareness for Upcoming Exams Set 6 (Payments Bank)

This set contains banking awareness questions for various upcoming exams like SBI PO, IBPS PO, Clerk and insurance exams. This set contains questions from the topic : Payments Bank.

1. A Payments Bank is licensed under which Act?
   A) Reserve Bank of India Act, 1934
   B) Banking Regulation Act, 1949
   C) Companies Act, 1956
   D) Payment and Settlement Systems Act, 2007
   
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   Option B
   Explanation: It will be registered as a public limited company under the Companies Act, 2013, and licensed under the Banking Regulation Act, 1949
2. A payments bank is licensed under ______ of Banking Regulation Act, 1949.
   A) Section 6
   B) Section 21
   C) Section 22
   D) Section 32
   
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   Option C
   Explanation: The payments bank will be licensed under Section 22 the Banking Regulation Act, 1949 .
3. What is the maximum balance that any account of payments bank can hold?
   A) Rs 2,50,000
   B) Rs 1,50,000
   C) Rs 1,00,000
   D) Rs 50,000
   
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   Option C
   Explanation: Payments bank will initially be restricted to holding a maximum balance of Rs. 100,000 per individual customer.
4. Identify the false statement.
   A) Payments bank cannot accept NRI deposits
   B) Payments banks cannot issue credit cards
   C) RBI envisage payments banks to be “virtual” banks or branchless banks.
   D) A payments bank may choose to become a BC of another bank
   
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   Option C
   Explanation: RBI does not envisage payments banks to be “virtual” banks or branchless banks.
5. The payments bank will be required to use the words ________ in its name in order to differentiate it from other banks.
   A) “Payments”
   B) “Payments Bank”
   C) “Payments Branch”
   D) “P Banks”
   
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   Option B
6. Payments Bank are required to invest minimum _____ per cent of its “demand deposit balances” in Government securities/Treasury Bills with maturity up to one year.
   A) 25 %
   B) 50 %
   C) 75 %
   D) 100 %
   
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   Option C
   Explanation: The payments bank cannot undertake lending activities. Apart from amounts maintained as Cash Reserve Ratio (CRR) with RBI on its outside demand and time liabilities, it will be required to invest minimum 75 per cent of its “demand deposit balances” in Government securities/Treasury Bills with maturity up to one year that are recognized by RBI as eligible securities for maintenance of Statutory Liquidity Ratio (SLR) and hold maximum 25 per cent in current and time / fixed deposits with other scheduled commercial banks for operational purposes and liquidity management.
7. What is the minimum paid-up equity capital of the payments bank?
   A) Rs 100 crore
   B) Rs 200 crore
   C) Rs 500 crore
   D) Rs 800 crore
   
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   Option A
   Explanation: The minimum paid-up equity capital of the payment bank shall be Rs. 100 crore. The bank shall be required to maintain a minimum capital adequacy ratio of 15 per cent of its risk weighted assets (RWA)
8. A payments bank will be recognized as Systematically Importatant when the net worth of the bank reaches _____ .
   A) Rs 350 crore
   B) Rs 500 crore
   C) Rs 550 crore
   D) Rs 800 crore
   
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   Option B
   Explanation: When the payment bank reaches the net worth of Rs.500 crore, and therefore becomes systemically important, diversified ownership and listing will be mandatory within three years of reaching that net worth.
9. Any shareholder’s voting rights in Payments bank are capped at 10 per cent. This limit can be raised to ___ %.
   A) 15%
   B) 20%
   C) 26%
   D) 40%
   
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   Option C
10. The promoter’s minimum initial contribution to the paid-up equity capital of payments bank shall at least be ____ per cent for the first five years from the commencement of its business.
    A) 20%
    B) 30%
    C) 40%
    D) 50%
    
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    Option C
    Explanation: The promoter’s minimum initial contribution to the paid-up equity capital of such payment bank shall at least be 40 per cent for the first five years from the commencement of its business.