In the Account Aggregator framework of the Reserve Bank of India, the entity that holds the customer’s financial data and shares it on consent is called the

The correct answer is B, the Reserve Bank of India Act, 1934. The Finance Act, 2022 amended Section 2 of the Reserve Bank of India Act so that the expression bank note includes a bank note issued in digital form, which gave the digital rupee the status of legal tender. Option A is wrong because the Banking Regulation Act, 1949 governs the licensing, management and supervision of banking companies and has nothing to do with the issue of currency. Option C is wrong because the Payment and Settlement Systems Act, 2007 authorises and regulates payment systems such as UPI and RTGS, but a CBDC is currency and not a payment system. Option D is wrong because the Coinage Act, 2011 deals with coins, their denominations and the Government’s power to mint them; coins are issued by the Government of India, while bank notes, now including the digital rupee, are issued by the Reserve Bank.

The correct answer is C, the settlement of secondary market transactions in Government securities. The wholesale pilot began on 1 November 2022 with a small group of banks, and its first use case was settling the secondary market leg of Government security trades, because that removes the need for a separate settlement guarantee arrangement and frees collateral. Option A is wrong because merchant payments belong to the retail pilot, e₹-R, which began a month later on 1 December 2022. Option B is wrong because cross-border use has been discussed as a later possibility but was not the first wholesale use case. Option D is wrong because subsidy transfers run through the direct benefit transfer system using ordinary bank accounts and the Aadhaar Payment Bridge; programmable CBDC has only been tested for such purposes, not deployed as the pilot’s first use.

The correct answer is B. The digital rupee is money, a liability of the Reserve Bank, so a transfer from one wallet to another is final the moment it happens and no interbank settlement follows. UPI, by contrast, is a payment instruction system run by the National Payments Corporation of India that moves money already held as a deposit in a bank account, and the banks settle between themselves afterwards. Option A is wrong because the digital rupee is issued by the Reserve Bank and is not an NPCI product at all. Option C is wrong and reverses the position: the digital rupee is legal tender under the amended Reserve Bank of India Act, while UPI is only a way of giving a payment instruction and can never be legal tender. Option D is wrong because the digital rupee deliberately pays no interest, so that savers are not drawn away from bank deposits.

The correct answer is B, 2008. The National Payments Corporation of India was incorporated in 2008 at the initiative of the Reserve Bank of India and the Indian Banks’ Association as the umbrella organisation for retail payments in India, and it is a not-for-profit company under what is now Section 8 of the Companies Act. Option A is wrong because 2005 precedes even the Payment and Settlement Systems Act, which was passed in 2007 and is the law under which NPCI’s systems are authorised. Option C is wrong because 2010 is the year in which NPCI launched the Immediate Payment Service, IMPS, not the year it was founded. Option D is wrong because 2016 is the year in which NPCI launched the Unified Payments Interface, its best known product; candidates often give the UPI year for the NPCI year, which is the trap in this question.

The correct answer is C, which is the incorrect statement. The retail digital rupee earns no interest, and this is a deliberate design decision: an interest-bearing CBDC would pull money out of bank deposits and shrink the funds banks have to lend, so the Reserve Bank kept it non-interest bearing like cash. Option A is correct and therefore not the answer, because e₹-R is a token-based bearer instrument held in a wallet offered by a bank. Option B is correct because the retail digital rupee is issued in the same denominations in which coins and bank notes are now issued. Option D is correct because both pilots follow the intermediated model, in which the Reserve Bank issues the digital rupee and banks distribute it, open the wallets and handle customer service, just as they distribute cash.