Banking & Financial Awareness Quiz: NPCI, UPI and RuPay

The correct answer is B, 2008. NPCI was incorporated in 2008 as a not for profit company under Section 25 of the Companies Act, 1956 to act as the umbrella organisation for all retail payment systems in India, and it began by taking over the National Financial Switch the following year. Option A is wrong because 2005 saw no such company; the enabling law itself came only in 2007. Option C is wrong because 2012 is the year RuPay, a product of NPCI, was launched, which candidates often mistake for the year of the company. Option D is wrong because 2016 is the year of UPI and BHIM, again products rather than the parent body. Fix the sequence in order: the Act in 2007, the company in 2008, RuPay in 2012 and UPI in 2016.

The correct answer is B, the Indian Banks Association. NPCI was set up on the initiative of the Reserve Bank of India together with the Indian Banks Association, and ten core promoter banks held its first shareholding, which is why it is owned by the banking industry rather than by the government. Option A is wrong because SEBI regulates the securities market and has no role in retail payment systems. Option C is wrong because NITI Aayog is a policy think tank created in 2015, seven years after NPCI came into being. Option D is wrong because the ministry for electronics and information technology promotes digital services and runs schemes such as Digital India, but it did not promote NPCI. Remember the pair as the central bank plus the bankers association.

The correct answer is C, 2016. UPI was launched by NPCI in 2016, and the BHIM application followed in December of the same year, which is why 2016 is the single most asked year in this topic. Option A is wrong because 2010 is the year of IMPS, the instant transfer service on which UPI was later built. Option B is wrong because 2012 belongs to RuPay, the domestic card network. Option D is wrong because 2019 is the year NEFT became available at all hours and the National Common Mobility Card was launched, not the year of UPI. A clean timeline answers a whole family of questions: the National Financial Switch taken over in 2009, IMPS in 2010, RuPay in 2012, UPI and BHIM in 2016, e-RUPI in 2021 and UPI 123PAY in 2022. Note also that UPI was launched as a pilot first and reached ordinary users through bank apps in the same year.

The correct answer is C, IMPS. The Immediate Payment Service, launched in 2010, already moved money between banks instantly at every hour, and UPI uses that rail while adding the virtual payment address, interoperable applications and single click authentication. Option A is wrong because RTGS is a large value system run by the Reserve Bank in which each transaction settles individually and a minimum of two lakh rupees applies. Option B is wrong because NEFT, also run by the Reserve Bank, settles in batches rather than instantly, so it could not have supported the instant experience of UPI. Option D is wrong because NACH is a bulk clearing system for salaries, subsidies and instalments and is not a person to person transfer rail. The point of the question is to separate the rail from the interface built over it.

The correct answer is A, the bank account number and IFSC. A virtual payment address takes the form of a name followed by a bank handle and acts as a pointer to the underlying account, so a payment can be made or collected without revealing the account number or the branch code. Option B is wrong because the Aadhaar number is the identifier used in the Aadhaar Enabled Payment System and the Aadhaar Payments Bridge, not the detail that a UPI address hides. Option C is wrong because the PAN is a tax identifier and plays no part in a UPI transaction. Option D is wrong because the mobile number is often the very thing linked to the address, and in the UPI number facility it is used to receive money. The privacy of bank details is the design idea being tested.

The correct answer is B, India's domestic card payment network. RuPay was launched by NPCI in 2012 so that debit and credit card transactions between Indian cardholders and Indian merchants are authorised and settled within the country instead of being switched abroad, and its name joins Rupee with Payment. Option A is wrong because the Reserve Bank does not run a mobile wallet; it authorises prepaid instrument issuers under the Act of 2007. Option C is wrong because the digital currency of the central bank is the e-rupee or CBDC, which is a different instrument altogether and is issued by the RBI, not by NPCI. Option D is wrong because remittance abroad is handled by other channels, and NPCI's cross border work is done through its subsidiary NIPL. RuPay is a card scheme, like the international schemes it replaced.

The correct answer is A, Dr B. R. Ambedkar. BHIM stands for Bharat Interface for Money, and the acronym was chosen in honour of Dr Bhimrao Ramji Ambedkar, the chairman of the drafting committee of the Constitution and a trained economist. Option B is wrong because Bhimsen Joshi was a Hindustani classical vocalist and a Bharat Ratna, honoured in music rather than in payments. Option C is wrong because the app is not named after the Mahabharata character, though the name is often assumed to be mythological. Option D is wrong because no such person is connected with the launch; the option exists only to look plausible. Along with the name, remember that BHIM is only one UPI app and any bank app can pay a BHIM user, because UPI is interoperable by design.

The correct answer is C, the Payment and Settlement Systems Act, 2007. Under this Act no person may commence or operate a payment system in India without authorisation from the Reserve Bank, and it created the Board for Regulation and Supervision of Payment and Settlement Systems within the RBI. Option A is wrong because the Banking Regulation Act of 1949 governs the licensing and working of banks as banks, not payment systems as such. Option B is wrong because the Negotiable Instruments Act of 1881 deals with cheques, bills of exchange and promissory notes, including the offence of dishonour. Option D is wrong because the RBI Act of 1934 constituted the central bank and covers currency issue and monetary matters. Questions pair the year 2007 with the system operators authorised under it, such as NPCI.

The correct answer is B, radio frequency identification. A FASTag is an RFID sticker on the windscreen which a reader at the toll plaza identifies from a distance, so the toll is debited from the linked account or wallet without the vehicle stopping; the programme is run by NPCI as National Electronic Toll Collection. Option A is wrong because near field communication works only over a few centimetres and is used in contactless cards and phone payments, not at a moving vehicle. Option C is wrong because the global positioning system fixes a location by satellite and is used in tracking and navigation, and a satellite based tolling idea is a separate and later proposal. Option D is wrong because Bluetooth pairing is unsuited to fast identification of passing vehicles. Tie FASTag to RFID and to the letters NETC.

The correct answer is A, the Electronic Clearing Service. NACH is the bulk payment system for many credits or debits at once, such as salary, pension, dividend, subsidy and direct benefit transfer on the credit side and loan instalments, insurance premiums and utility bills on the debit side, and it took over the work of the older ECS with a single national presentation. Option B is wrong because RTGS is a large value real time system operated by the Reserve Bank and still very much in use. Option C is wrong because the Cheque Truncation System clears cheques from their images and is a separate NPCI system, not something NACH replaced. Option D is wrong because the National Financial Switch is the ATM network NPCI took over in 2009. The mandate based e-mandate facility is part of NACH.