Financial Inclusion and Digital Payments: UPI and PMJDY

The correct answer is B, 2014. The Pradhan Mantri Jan Dhan Yojana was launched on 28 August 2014 as the national mission for financial inclusion, offering a zero-balance Basic Savings Bank Deposit Account, a RuPay debit card with accident insurance cover and an overdraft facility for accounts operated satisfactorily. Option A is wrong because 2012 is the year the RuPay card network was launched and the year the no-frills account was renamed the Basic Savings Bank Deposit Account. Option C is wrong because 2015 is the year of the social security package, when the Pradhan Mantri Jeevan Jyoti Bima Yojana, the Pradhan Mantri Suraksha Bima Yojana, the Atal Pension Yojana and MUDRA were announced. Option D is wrong because 2016 is the year the Unified Payments Interface was launched by NPCI.

The correct answer is C, the National Payments Corporation of India. NPCI, set up in 2008 as the umbrella organisation for retail payments in the country, built and runs the Unified Payments Interface, along with RuPay, IMPS, the Aadhaar Enabled Payment System, the National Automated Clearing House and FASTag. Option A is wrong because the Reserve Bank promoted NPCI with the Indian Banks' Association and regulates payment systems under the Payment and Settlement Systems Act, 2007, but it does not itself operate UPI; it does operate RTGS and NEFT. Option B is wrong because the State Bank of India is only one of the member banks on the system. Option D is wrong because SEBI regulates the securities market and has no role in retail payments.

The correct answer is B, giving loans and issuing credit cards. Payments banks were licensed on the recommendation of the Nachiket Mor Committee to widen access to deposits and payments, and the Reserve Bank's guidelines expressly bar them from lending and from issuing credit cards; their funds must go into government securities and deposits with other banks. Option A is wrong because taking deposits, up to a ceiling for each customer, is their main business. Option C is wrong because they may issue debit and ATM cards. Option D is wrong because they are allowed to distribute simple financial products such as insurance and mutual funds as an agent. Small finance banks are the other new category and they do lend, mainly in small amounts to the priority sector.

The correct answer is B, fifty thousand rupees. MUDRA loans to non-farm micro enterprises are graded in three named categories: Shishu for loans up to fifty thousand rupees, Kishore for loans above fifty thousand and up to five lakh, and Tarun for loans above five lakh and up to ten lakh, with a higher slab added later for borrowers who have repaid an earlier loan. Option A is wrong because twenty-five thousand is not a MUDRA boundary. Option C is wrong because one lakh falls inside the Kishore range and is not the limit of any category. Option D is wrong because five lakh is the upper limit of Kishore and the lower limit of Tarun, a pairing examiners use as a distractor. All MUDRA loans are collateral-free and are given through banks and microfinance institutions.

The correct answer is B, two lakh rupees. Real Time Gross Settlement is designed for large-value transfers, each settled singly and immediately in the books of the Reserve Bank, and the minimum amount for a customer transaction is two lakh rupees with no upper ceiling. Option A is wrong because one lakh is the figure candidates most often misremember, and it belongs to no current rule of RTGS. Option C is wrong because five lakh is not a threshold in the system. Option D is wrong because it is NEFT, not RTGS, that has no minimum amount; NEFT settles in batches and is used for ordinary payments of any size. IMPS, run by NPCI, is the third system, instant and available through mobile and internet banking, and all three now work on every day of the year.

The correct answer is A, Jan Dhan, Aadhaar and Mobile. The expression describes the three pieces that together make a cash transfer possible: a bank account opened under the Jan Dhan Yojana to receive the money, the Aadhaar number to identify the beneficiary and remove duplicate names, and the mobile phone through which the beneficiary is informed and can transact. Option B is wrong because Atal Pension Yojana and MUDRA are schemes that use the Jan Dhan account but are not part of the trinity. Option C is wrong because Jan Suraksha is the collective name of the insurance and pension schemes, not a letter of JAM. Option D is wrong because Ayushman Bharat is the health assurance scheme and MGNREGA the rural employment law, both users of direct benefit transfer rather than parts of it.

The correct answer is B, two lakh rupees for ages 18 to 50. The Pradhan Mantri Jeevan Jyoti Bima Yojana is a one-year renewable life insurance cover of two lakh rupees on death from any cause, open to holders of a savings bank account between eighteen and fifty years of age, with the premium debited from the account. Option A is wrong because the cover is two lakh, not one lakh. Option C is wrong because eighteen to seventy is the age band of the Pradhan Mantri Suraksha Bima Yojana, the accident cover, which pays two lakh for accidental death or total disability and one lakh for partial disability; swapping the two age bands is the standard trap. Option D is wrong because neither the amount nor the ages match any of the Jan Suraksha schemes.

The correct answer is A, 18 to 40 years. The Atal Pension Yojana, launched in 2015 and administered by the Pension Fund Regulatory and Development Authority, admits subscribers between eighteen and forty years of age so that every subscriber contributes for at least twenty years before the pension begins at sixty. The guaranteed pension ranges from one thousand to five thousand rupees a month, according to the contribution chosen. Option B is wrong because eighteen to fifty is the age band of the Jeevan Jyoti life insurance scheme. Option C is wrong because twenty-one is not an entry age under any of these schemes. Option D is wrong because twenty-five to sixty would leave too short a contribution period for the guarantee to work, and no such band exists in the scheme.

The correct answer is C, 2008. NPCI was incorporated in 2008 as a not-for-profit umbrella organisation for retail payments, promoted by the Reserve Bank of India and the Indian Banks' Association under the framework of the Payment and Settlement Systems Act, 2007. Option A is wrong because 2005 is the year the Reserve Bank asked banks to offer no-frills accounts for financial inclusion. Option B is wrong because 2007 is the year of the Payment and Settlement Systems Act, the law under which payment systems are authorised and regulated, which examiners deliberately place next to the year of NPCI. Option D is wrong because 2010 is the year IMPS was launched by NPCI, two years after the organisation itself was set up, with RuPay following in 2012 and UPI in 2016.

The correct answer is A, the Aadhaar number and fingerprint. The Aadhaar Enabled Payment System lets a customer withdraw or deposit cash, check a balance or transfer money at a micro ATM held by a business correspondent, identifying himself with the bank name, the Aadhaar number and a biometric such as a fingerprint, so neither a card nor a cheque is needed. It is the instrument that carries banking to villages without branches. Option B is wrong because a card and PIN belong to an ATM or point-of-sale transaction. Option C is wrong because a cheque and passbook are branch instruments and defeat the purpose of a system meant for those without easy branch access. Option D is wrong because a virtual payment address with a UPI PIN describes UPI.

The correct answer is B, 1975. Regional Rural Banks were set up from 1975 on the recommendation of a working group chaired by M. Narasimham, to provide credit to small and marginal farmers, agricultural labourers and rural artisans, and the Regional Rural Banks Act followed in 1976. Each is sponsored jointly by the Union government, the concerned state government and a commercial bank, which hold its capital in fixed shares. Option A is wrong because 1969 is the year fourteen commercial banks were nationalised and the Lead Bank Scheme began. Option C is wrong because 1980 is the year six more banks were nationalised. Option D is wrong because 1982 is the year NABARD was established as the apex institution for rural and agricultural credit.

The correct answer is A, the Basic Savings Bank Deposit Account. The Reserve Bank asked banks in 2005 to offer a no-frills account with nil or very low minimum balance so that poor households would not be kept out by charges, and in 2012 the product was renamed the Basic Savings Bank Deposit Account, with a free debit card and a limited number of free withdrawals. It is the account opened under the Jan Dhan Yojana. Option B is wrong because a recurring deposit is a savings instrument with fixed monthly instalments. Option C is wrong because a current account is meant for business and usually carries a higher balance requirement. Option D is wrong because a fixed deposit locks a sum for a term and is not an inclusion account.