Q. With reference to small finance banks in India, consider the following statements:
- AU Small Finance Bank is the first small finance bank in India.
- Small finance banks primarily focus on providing financial inclusion to underserved sections of society.
- Small finance banks can accept deposits and provide loans, but cannot issue credit cards.
- The Reserve Bank of India regulates small finance banks under the Banking Regulation Act, 1949.
How many of the above statements is/are correct?
Answer:
Only two
Notes:
- AU Small Finance Bank is the first small finance bank in India: This is incorrect. The first small finance bank in India was Capital Small Finance Bank, established in 2016.
- Small finance banks primarily focus on providing financial inclusion to underserved sections of society: This is correct. They aim to serve the unbanked and underbanked populations.
- Small finance banks can accept deposits and provide loans, but cannot issue credit cards: This is incorrect. Small finance banks can issue credit cards, subject to regulatory approvals.
- The Reserve Bank of India regulates small finance banks under the Banking Regulation Act, 1949: This is correct. RBI oversees their operations and compliance.
Thus, two of the statements are correct. The correct answer is (B) Only two.