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 promoters contribution in Small finance
banks?
Answer: At least 40 %

Question 10.
Promoters 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 Indias 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%

Payment Banks vs Small Finance Banks

Important Points:

Name of the Bank Head Office Tagline MD & CEO

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

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
New Delhi Suresh Sethi
(Aapka Bank Aapke Dwar)
Paytm Payments Bank Ltd Noida, UP Renu Satti