The promoters minimum initial contribution to the paid-up equity capital of such payments bank shall at least be.....for the first five years from the commencement of its business.

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

The promoter’s minimum initial contribution to the paid-up equity capital of such payments bank shall at least be____for the first five years from the commencement of its business.

A	20%
B	30%
C	50%
D	40%

Explanation:

Detailed explanation-1: -The promoter’s minimum contribution of 40 per cent of paid-up equity capital shall be locked in for a period of five years from the date of commencement of business of the bank.

Detailed explanation-2: -In view of the inherent risk of a small finance bank, it shall be required to maintain a minimum capital adequacy ratio of 15 per cent of its risk weighted assets (RWA) on a continuous basis, subject to any higher percentage as may be prescribed by RBI from time to time.

Detailed explanation-3: -The minimum paid-up voting equity capital for a bank shall be 500 Crore Rupees for universal banks and 200 Crore Rupees for small finance banks. And any addition to this capital will be based upon the plan presented by the promoters of the bank to the RBI.

Detailed explanation-4: -Scheduled banks are those banks that are listed under Schedule II of the Reserve Bank of India Act, 1934. The bank’s paid-up capital and raised funds must be at least Rs. 5 lakh to qualify as a scheduled bank.

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