The establishment of 'Payment Banks' is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context? 1. Mobile telephone companies and supermarket chains that are owned and controlled, by residents are eligible to be promoters of Payment Banks. 2. Payment Banks can issue both credit cards and debit cards. 3. Payment Banks cannot undertake lending activities. Select the correct answer using the code given below.

Payment Banks were introduced in India with the primary objective of promoting financial inclusion by providing small savings accounts and payment/remittance services to migrant labour workforce, low-income households, small businesses, and other unbanked/under-banked entities. Let's examine the statements:

Mobile telephone companies and supermarket chains that are owned and controlled, by residents are eligible to be promoters of Payment Banks: The Reserve Bank of India (RBI) guidelines for Payment Banks specifically allow various entities, including non-bank Pre-paid Payment Instrument (PPI) issuers, NBFCs, corporate Business Correspondents, mobile telephone companies, supermarket chains, and public sector entities to apply for a Payment Bank license, provided they are owned and controlled by residents. This statement is correct. Payment Banks can issue both credit cards and debit cards: Payment Banks are permitted to issue debit cards and ATM cards, but they are explicitly prohibited from issuing credit cards. Their focus is on payments and remittances, not credit creation. This statement is incorrect. Payment Banks cannot undertake lending activities: Payment Banks are not permitted to undertake any lending activities, whether directly or indirectly. Their operations are restricted to deposits (up to a certain limit per customer) and payments/remittances. This measure is in place to contain risk and ensure their focus on financial inclusion through payment services. This statement is correct. Based on the analysis, statements 1 and 3 are correct.