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.

(a) 1 and 2 only

(b) 1 and 3 only

(c) 2 only

(d) 1, 2 and 3

Answer: b

Explanation: 

Payments Bank 

The payments bank will be registered as a public limited company under the Companies Act, 2013, and licensed under Section 22 of the Banking Regulation Act, 1949, with specific licensing conditions restricting its activities mainly to the acceptance of demand deposits and the provision of payments and remittance services. 

The payments banks are given the status of scheduled banks under section 42 (6) (a) of the Reserve Bank of India Act, 1934. 

i) Objectives: Financial inclusion by providing (i) small savings accounts and (ii) payments/remittance services to migrant labour workforce, low-income households, small businesses, other unorganised sector entities and other users. 

ii) Eligible promoters: Non-Bank Pre-paid Payment Instrument (PPI) issuers; Non-Banking Finance Companies (NBFCs), corporate Business Correspondents (BCs), mobile telephone companies, supermarket chains, companies, real sector cooperatives. A promoter/promoter group can have a joint venture with an existing scheduled commercial bank to set up a payments bank.

iii) Scope of activities : 

• Acceptance of demand deposits. Payments bank will initially be restricted to holding a maximum balance of Rs. 1,00,000 per individual customer. The eligible deposits mobilised by the payments bank would be covered under the deposit insurance scheme of the Deposit Insurance and Credit Guarantee Corporation of India (DICGC). 
• Issuance of ATM/debit cards. Payments banks, however, cannot issue credit cards.
• Payments and remittance services through various channels including branches, Automated Teller Machines (ATMs), Business Correspondents (BCs) and mobile banking. 
• Issuance of PPIs as per instructions issued from time to time under the PSS Act. 
• Internet banking – The RBI is also open to payments banks offering Internet banking services. 
• Functioning as Business Correspondent (BC) of another bank, Distribution of non-risk sharing simple financial products like mutual fund units and insurance products, etc.
• The payments bank can accept remittances to be sent to or receive remittances from multiple banks under a payment mechanism approved by RBI, such as RTGS / NEFT / IMPS.
• Payments banks will be permitted to handle cross-border remittance transactions in the nature of personal payments/remittances on the current account.
• The payments bank may undertake utility bill payments, etc., on behalf of its customers and general public.

Hence, 1 and 3 are correct