Cards, ATMs and Digital Banking: Systems and PYQs

The correct answer is C, BHIM. The Bharat Interface for Money application was released in December 2016 by the National Payments Corporation of India so that payments over the Unified Payments Interface, launched earlier that year, could be made from any smartphone with a bank account linked to it. The app is named after Dr B. R. Ambedkar and works through a virtual payment address and a UPI PIN. Options A, B and D are wrong because NAKUL, GANDIV and JANAK are not payment applications at all; they are names drawn from the epics and are placed in the options only as distractors. In questions of this kind the safe method is to remember that the National Payments Corporation of India runs RuPay, IMPS, UPI, BHIM, AePS and FASTag.

The correct answer is D, State Bank of India. YONO, which stands for You Only Need One, was launched by the State Bank of India as a single application for banking, investment, insurance and online shopping, and it also allows cash withdrawal at the bank's machines without a card. Option A is wrong because HDFC Bank offers its own mobile banking and payment applications under different names. Option B is wrong because Punjab National Bank runs its own digital platform and is not connected with YONO. Option C is wrong because ICICI Bank has its own application as well. Questions on bank applications are answered by holding the app and the bank together as a pair, exactly as the folk forms are held with their states in another subject.

The correct answer is B, the National Payments Corporation of India. UPI was launched in 2016 and allows a payment from one bank account to another through a mobile application, using a virtual payment address instead of the account number and a UPI PIN for authentication. Option A is wrong because the Reserve Bank of India regulates payment systems and itself operates NEFT and RTGS, but not UPI. Option C is wrong because the Indian Banks' Association is one of the promoters of the National Payments Corporation of India but does not run the system. Option D is wrong because the State Bank of India is a member bank, like every other bank on the network. Remember the division: the central bank runs NEFT and RTGS, the corporation runs the retail systems.

The correct answer is B, the National Payments Corporation of India. RuPay was launched as an Indian card network so that domestic card payments would be settled within the country instead of through foreign networks, and its cards are issued by banks for savings accounts and under government schemes. Option A is wrong because the Reserve Bank of India is the regulator of the payment system and the promoter of the corporation, but the network itself is not its product. Option C is wrong because the Securities and Exchange Board of India regulates the securities market and has no role in card payments. Option D is wrong because the Ministry of Finance frames policy but does not operate a card network. The name is a combination of rupee and payment.

The correct answer is B, automated teller machine. The machine does the work of a teller at the counter, giving cash, accepting deposits, printing statements and taking requests, and it works at any hour without a member of the staff. Option A is wrong because automatic transfer machine is not the expansion, although transfers can be made at some machines. Option C is wrong because any time money is only a popular description used in advertisements and not the technical expansion of the letters. Option D is wrong because account transaction module is not a term in use. Full forms are asked very often in banking papers, so the exact words matter: the letter T stands for teller, the human cashier whose work the machine took over.

The correct answer is B, a non-bank entity authorised by the Reserve Bank. Such an operator is authorised under the Payment and Settlement Systems Act of 2007, the machine carries the operator's own brand instead of a bank's, cards of every bank work on it, and the cash is supplied through a sponsor bank. Option A is wrong because a machine owned by a bank is simply that bank's ATM. Option C is wrong because the Reserve Bank regulates and authorises but does not run cash machines for the public. Option D is wrong because a co-operative bank's machine is again a bank's own ATM. The contrast to learn is the brown label ATM, where the hardware belongs to a service provider but the bank supplies the cash and holds the licence, so the bank's name is displayed.

The correct answer is B, it pays from the money already in the holder's account. The amount of a debit card payment leaves the account at once, which is the essential difference from a credit card, where the bank pays first from a limit it has granted and bills the holder later with an interest free period. Option A is wrong for that reason, as it describes a credit card. Option C is wrong because a debit card works at the machines of other banks as well, through the shared network that connects the country's ATMs. Option D is wrong because debit cards are issued to savings account holders as a matter of course, including under government schemes. A prepaid card is a third kind, loaded with an amount in advance.

The correct answer is C, two lakh rupees. Real Time Gross Settlement is meant for large value payments, which are settled one transaction at a time as they are received rather than in batches, and the system sets a floor of two lakh rupees with no upper limit. Option A is wrong because ten thousand rupees is not a limit in any of these systems. Option B is wrong because one lakh rupees is a figure from other contexts and not the RTGS floor. Option D is wrong because it is NEFT that has no minimum; any amount can be sent through it and the service is available round the clock. Examiners set RTGS and NEFT against each other, so keep the floor of two lakh rupees with RTGS alone.

The correct answer is B, the Aadhaar number and a fingerprint. The system, run by the National Payments Corporation of India, lets a customer withdraw cash, deposit money or check a balance at a banking correspondent's micro ATM by giving the Aadhaar number, the name of the bank and a biometric authentication, without a card or a cheque. Option A is wrong because a cheque and signature belong to the counter of a branch. Option C is wrong because a card and a PIN describe an ordinary ATM withdrawal, which is exactly what this system removes the need for. Option D is wrong because a passbook is a record and not a means of authentication. The system was designed to bring banking to villages through correspondents.

The correct answer is A, radio frequency identification. A FASTag is a sticker on the windscreen that a reader at the toll plaza identifies by radio, so the toll is deducted from a linked account and the vehicle need not stop; the system is called National Electronic Toll Collection and is run by the National Payments Corporation of India. Option B is wrong because the global positioning system gives location and is used for navigation and for tracking vehicles, not for the tag itself. Option C is wrong because near field communication is the technology of contactless cards and phone payments, which work only at a few centimetres. Option D is wrong because optical character recognition reads printed text, and number plate reading is a separate arrangement.