Pradhan Mantri Mudra Yojana (PMMY) is a government scheme launched in 2015 to provide financial support to small and micro enterprises in India. The scheme aims to promote entrepreneurship, generate employment, and uplift the socio-economic status of the beneficiaries. Under PMMY, loans are provided to individuals, enterprises, and institutions in three categories - Shishu, Kishor, and Tarun, based on the loan amount.

The Member Lending Institutions for the Pradhan Mantri Mudra Yojana (PMMY) include:

a) Scheduled Commercial Banks (SCBs)
Scheduled Commercial Banks refer to banks that are included in the Second Schedule of the Reserve Bank of India Act, 1934. These banks are regulated by the Reserve Bank of India (RBI) and offer a wide range of banking services to individuals and businesses. Examples of SCBs in India include State Bank of India (SBI), HDFC Bank, ICICI Bank, etc. SCBs are an important part of PMMY and play a crucial role in disbursing loans to the beneficiaries.

b) Regional Rural Banks (RRBs)
Regional Rural Banks are financial institutions established under the Regional Rural Banks Act, 1976. These banks are created with the objective of providing banking services in remote rural areas and promoting rural development. RRBs are sponsored by scheduled commercial banks, state governments, and the central government. They play a significant role in the implementation of PMMY by extending credit facilities to small and micro enterprises in rural areas.

c) Non-Banking Financial Companies (NBFCs)
Non-Banking Financial Companies are financial institutions that provide banking services without having a full banking license. NBFCs are regulated by the RBI and offer various financial products and services, including loans, leasing, hire purchase, etc. Many NBFCs participate in PMMY by providing loans to small and micro enterprises, thereby facilitating their growth and development.

d) Micro Finance Institutions (MFIs)
Micro Finance Institutions are specialized financial institutions that provide financial services to low-income individuals and small businesses who have limited access to traditional banking services. These institutions offer small loans, savings, insurance, and other financial products tailored to the needs of the target population. MFIs are an important part of PMMY as they focus on providing credit to the economically weaker sections of society.

e) Payment Banks
Payment Banks are a new category of banks introduced by the RBI in 2014. These banks are allowed to carry out limited banking activities, primarily focusing on providing payment services and remittance facilities to individuals and businesses. However, payment banks are not eligible to become Member Lending Institutions for PMMY as they do not have the necessary infrastructure and experience in providing credit facilities to small and micro enterprises.

In conclusion, the correct answer is option 'E' - Payment Banks. Payment Banks cannot be the Member Lending Institutions for the Pradhan Mantri Mudra Yojana (PMMY) as they primarily focus on payment services and do not have the necessary experience and infrastructure to provide credit facilities to small and micro enterprises.