UPSC Prelims 2017 Q79: Indian Economy – Digital Payments & Financial Inclusion
Consider the following statements:
1. The National Payments Corporation of India (NPCI) helps in promoting financial inclusion in the
country.
2. NPCI has launched RuPay, a card payment scheme.
Which of the above statements is/are correct?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Answer: (c) Both 1 and 2
Explanation
National Payments Corporation of India (NPCI)
Set up in 2008 by the RBI and the Indian Banks' Association.
It is a not-for-profit company that runs India's retail payment systems.
| Statement | Verdict | Fact |
|---|---|---|
| 1. NPCI helps in promoting financial inclusion in the country | Correct | Low-cost products such as RuPay, AePS and UPI bring banking to the poor |
| 2. NPCI has launched RuPay, a card payment scheme | Correct | RuPay was launched in 2012 as India's own card network |
NPCI products:
| Product | Use |
|---|---|
| RuPay | Domestic card payment scheme |
| UPI and BHIM | Instant mobile payments |
| IMPS | Immediate bank transfer, round the clock |
| AePS | Aadhaar-based payments at micro-ATMs |
| NACH | Bulk payments such as subsidies and salaries |
Answer: (c) Both 1 and 2.
Why each option is right or wrong
- (a) Incorrect. Statement 2 is also true: NPCI launched the RuPay card payment scheme.
- (b) Incorrect. Statement 1 is also true: NPCI promotes financial inclusion.
- (c) CORRECT. NPCI promotes financial inclusion and launched RuPay.
- (d) Incorrect. Both statements about the National Payments Corporation of India are true.
Key point
NPCI (2008, by RBI and IBA): not-for-profit; runs RuPay, UPI, BHIM, IMPS, AePS and NACH; promotes financial inclusion.
Remember
NPCI = RuPay + UPI + financial inclusion.
Common mistakes
- Thinking NPCI is a government department; it is a company owned by banks.
- Assuming RuPay was launched by the RBI itself.
- Confusing NPCI with NPCIL, the Nuclear Power Corporation.
Exam tip
Every Indian retail payment brand (RuPay, UPI, BHIM, IMPS) belongs to NPCI.
Sources
- National Payments Corporation of India — About us
- Reserve Bank of India — Payment and Settlement Systems Act, 2007