[Solved] Which of the following is NOT true regarding Payment bank? (2024)

FAQs

Which of the following is not true about bank payment rules? ›

The statement that is NOT true about bank payment rules is: If a drawer and a payee or holder have accounts at different banks, the check is called an "on us" item.

Detailed Solution. The Correct Answer is Option 4 i.e Credit cards can be issued. Payments banks is an Indian new model of banks conceptualized by the Reserve Bank of India (RBI). These banks cannot issue loans and credit cards.

Payment banks cannot issue credit cards. It cannot accept time deposits or NRI deposits. It cannot issue loans. It cannot set up subsidiaries to undertake non-banking financial activities.

Detailed Solution. The correct answer is Payments Banks cannot sell mutual funds, insurance and pension funds but Small Finance Banks can.

Final answer: The statement that 'banks must keep the vast majority of their deposits on hand in case customers want to withdraw cash' is not true.

The term Zero hour is NOT used in the banking field. Zero Hour is a term used in Parliament. Zero Hour is the time when Members of Parliament can raise Issues regarding the urgent public importance.

The main objective of payments bank is to widen the spread of payment and financial services to small business, low-income households, migrant labour workforce in secured technology-driven environment.

Definition – A Payments Bank is like any other bank, but operating on a smaller scale without involving any credit risk. It can carry out most banking operations but can't advance loans or issue credit cards.

Payment Banks accept demand deposits. They are responsible for issuing ATM/debit cards but cannot issue credit cards. Another scope of activity is payments and remittance services through various channels.

Regulations under Payment Bank

The minimum capital requirement is 100 crore. For the first five years, the stake of the promoter should remain at least 40%.

What is a payment in a bank? ›

What Is a Bank Payment? A bank payment is a transfer from one bank account to another. It is a form of digital payment that leverages technology to transfer currency.

Incorrect Payments means a payment incorrectly paid or transferred to the Payment Account, identified as such by the Servicer and confirmed by the Transaction Manager which will not form part of Available Interest Distribution Amount or the Available Principal Distribution Amount; Sample 1.

Differences between Small Finance Banks and Payments Banks

The Payment banks also can only accept demand deposits and the hold up to Rs. 2 lakh per person, whereas Small Finance Banks can accept all types of deposits, including FDs, RDs, Savings, and Current Accounts.

The lender's land is not included in terms of credit in a bank loan. A collection of criteria under which a loan is granted is known as terms of credit.

the fiscal deficit is not concerned with the banking organization because the fiscal deficit is related to a country's economy not to the banking organization.

Final answer:

Transporting money is not a function of a banking system; this task is typically carried out by specialized security firms. Banks are involved in offering loans and accounts that facilitate transactions and reduce the need to carry cash.

Transfer of funds is not a primary function of commercial banks, but rather a secondary function. The primary functions of commercial banks include creating credit, lending loans to the public, and receiving deposits from the public.

Bank Rules means the policies, procedures, operating rules and regulations of Bank, as amended from time to time by Bank in the exercise of its reasonable discretion, and incorporated into the Operating Procedures or Product Schedules.