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.

Let's analyze each statement regarding Payment Banks in India:

Statement 1: Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks. This aligns with RBI guidelines which permit existing Non-Bank PPI issuers, NBFCs, corporate BCs, mobile telephone companies, supermarket chains, companies, real sector cooperatives, and public sector entities owned and controlled by residents to apply for establishing payment banks. Therefore, Statement 1 is correct.

Statement 2: Payment Banks can issue debit cards but cannot issue credit cards. This is because they are restricted from lending. Therefore, Statement 2 is incorrect.

Statement 3: Payment Banks cannot undertake lending activities as per RBI guidelines. Their primary function is to facilitate payments and deposits, not to provide loans. Therefore, Statement 3 is correct.

Hence, only statements 1 and 3 are correct.

Sources:

• RBI Press Release - Guidelines for Licensing of Payments Banks