Small Finance Banks and Payments Banks (Important Points)

Small Banks

Question 1.

The Reserve Bank of India had granted 'in-principle' approval to how many applicants to set up Small Finance Banks.
Answer: 10

Question 2.

What is the validity of the “in-principle” approval granted to enable the applicants to comply with the requirements and fulfil other conditions as stipulated by the RBI?
Answer: 18 months

Question 3.

Under what act the RBI issued a license to open the small finance bank?
Answer: Banking Regulation Act, 1949

Question 4.

The RBI issued license under what section of the Banking Regulation Act, 1949?
Answer: Section 22

Question 5.

Which committee is associated with small banks?
Answer: Dr Nachiket Mor

Question 6.

How many years of experience an individual should have in banking and finance, companies and Societies to become eligible as promoters to set up small banks.
Answer: 10 years

Question 7.

How many years of professional experience a promoter/promoter groups should have in order to be eligible to promote small finance banks.
Answer: 5 years

Question 8.

Small Finance Bank should be registered as a public limited company under which act?
Answer: The Companies Act, 2013

Question 9.

What should be the promoter’s contribution in Small finance banks?
Answer: At least 40 %

Question 10.

Promoter’s contribution of 40% should be for how much time?
Answer: 5 years. The shareholding should be brought down to 40 % by the end of the 5th year, to 30 percent by the end of 10th year and to 26 percent in 12 years.

Question 11.

The maximum loan size to single/group borrowers/issuers would be restricted to what percent of total capital funds?
Answer: 15%

Question 12.

Loans and advances (up to Rs 25 lakhs), primarily to micro enterprises, should constitute at least what percent of the loan portfolio?
Answer: 50%

Question 13.

For the first three years, what percent of branches of small finance banks should be in unbanked rural areas?
Answer: 25%

Question 14.

Initially, for how many years prior approval is required in case of branch expansion?
Answer: 3 years

Question 15.

The small finance banks are required to extend what percent of their Adjusted Net Bank Credit (ANBC) to the sectors eligible for classification as priority sector lending (PSL) by the Reserve Bank?
Answer: 75%

Question 16.

Which is India’s first small bank?
Answer: Capital Small Finance Bank

Question 17.

Maximum loan size to an individual cannot exceed what percent of total capital funds?
Answer: 10%

Question 18.

Maximum loan size in case of a group cannot exceed what percent of total capital funds?
Answer: 15%

Important Points:

Name of the Bank	Head Office	Tagline	MD & CEO
Capital Small Finance Bank	Jalandhar, Punjab	Vishwas se Vikas Tak	Sarvjit Singh Samra
Equitas Small Finance Bank	Chennai	It’s fun banking	PN Vasudevan
Utkarsh Small Finance Bank	Varanasi, UP	Aapki Umeed Ka khata	Govind Singh
Suryoday Small Finance Bank	Belapur, Navi Mumbai	A bank of smiles	Baskar Babu Ramachandran
Ujjivan Small Finance Bank	Bengaluru, Karnataka	Bharosa Aap Ke Bharose Par	Samit Ghosh
ESAF Small Finance Bank	Thrissur, Kerala	Joy of Banking	K Paul Thomas
Au Small Finance Bank	Jaipur, Rajasthan	Chalo Aage Badhe	Sanjay Agarwal
Fincare Small Finance Bank	Bengaluru, Karnataka	Banking on More	Rajeev Yadav
North East Small Finance Bank	Guwahati, Assam	Your Door Step Banker	Rupali Kalita
Janlaxmi Small Finance Bank	Bengaluru

Payment Banks

Question 1.

Which bank cannot lend money to the bank?
Answer: Payment Bank

Question 2.

Which bank cannot accept fixed deposits (FDs), term deposits, recurring deposits (RDs) and any non-resident Indian deposits?
Answer: Payment Banks

Question 3.

Payments banks can accept deposits up to what amount per individual?
Answer: 1 Lakh

Question 4.

Credit cards cannot be issued by which banks?
Answer: Payment Banks (They can issue debit cards but not credit cards)

Question 5.

Which committee is associated with payment banks?
Answer: Nachiket Mor

Question 6.

How many entities were initially granted the In-Principle licence by RBI to set up payment banks?
Answer: 11

The following 11 entities were initially granted licence by RBI:

• Airtel M-Commerce Services 
• Department of Posts 
• Aditya Birla Nuvo 
• FINO PayTech 
• Cholamandalam Distribution Services 
• National Securities Depository 
• Paytm 
• Tech Mahindra 
• Vodafone M-Pesa 
• Reliance Industries 
• Sun Pharmaceuticals (Dilip Shanghvi) 

Question 7.

Which three organisations surrendered their licences?
Answer: Cholamandalam Distribution Services, Sun Pharmaceuticals (Dilip Shanghvi), and Tech Mahindra

Question 8.

What is the minimum capital requirement to set up a Payment Bank?
Answer: Rs. 100 crore.

Question 9.

How much should be the stake of the promoter for the initial 5 year period?
Answer: Minimum 40%.

Question 10.

Airtel Payment Bank is a joint venture between which two entities?
Answer: Bharti Airtel (80.1%) and Kotak Mahindra Bank (19.9%)

Question 11.

Who is the MD&CEO of Airtel Payment Bank?
Answer: Mr.Shashi Arora

Question 12.

Which is a fully digital and paperless bank?
Answer: Airtel payment bank

Question 13.

What limit of FDI is allowed in payment banks?
Answer: 74%

Question 14.

What percent of CRR must be maintained by payment banks in government bonds for one year?
Answer: Minimum 75% 

Question 15.

What maximum percentage must be maintained in FDs and RDs of other scheduled commercial banks?
Answer: 25%

Question 16.

What percent of branches should be in unbanked rural areas?
Answer: 25%

Question 17.

The voting right of any shareholder is capped at what percent?
Answer: 10%

Question 18.

Any acquisition by the bank that is more than what percent requires approval by the RBI?
Answer: 5%

Important Points:

Name of the Bank	Head office	MD & CEO
Airtel Payments Bank Ltd	New Delhi	Shashi Arora
Fino Payments Bank Ltd	Mumbai	Rishi Gupta
Indian Post Payments Bank Ltd (Aapka Bank Aapke Dwar)	New Delhi	Suresh Sethi
Paytm Payments Bank Ltd	Noida, UP	Renu Satti