Multiple Choice Questions on With reference to the Digital Bank consider the following statements It will be defined in the Banki........... for UPSC Civil Services Examination (General Studies) Preparation

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Multiple Choice Questions

With reference to the Digital Bank consider the following statements It will be defined in the Banki...........

Economic Affairs Types of Banks and Banking
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    With reference to the Digital Bank, consider the following statements

    1. It will be defined in the Banking Regulation Act, 1949.
    2. It shall have its own balance sheet and legal existence.
    3. It will not be subject to prudential and liquidity norms on a par with existing commercial banks.

    Select the correct statement.

    1&2 only

    Correct Answer

    2&3 only

    Incorrect Answer

    1&3 only

    Incorrect Answer

    All of the above

    Incorrect Answer
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    Explanation:

    Both statements 1&2 are correcct.
    Digital Bank

    • It will be defined in the Banking Regulation Act, 1949, and shall have its own balance sheet and legal existence.
    • It will be different from the 75 Digital Banking Units (DBUs) -- announced by Finance Minister in Union Budget 2022-23 -- which are being set up to push digital payments, banking and fintech innovations in underserved areas.
    • A DBU is a specialised fixed point business unit or hub housing certain minimum digital infrastructure for delivering digital banking products and services as well as servicing existing financial products and services digitally in self-service mode at any time.
    • Digital banks will be subject to prudential and liquidity norms on a par with existing commercial banks. 

    Hence option 1st is correct.

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