The National Automated Clearing House, or NACH, of NPCI replaced which earlier system?
- A.Electronic Clearing Service
- B.Real Time Gross Settlement
- C.Cheque Truncation System
- D.National Financial Switch
Correct answer
Explanation
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.
Read the full article: NPCI, UPI and RuPay: Retail Payment Systems of India
Practice Questions
View allThe National Payments Corporation of India was incorporated in which year?
- A.2005
- B.2008
- C.2012
- D.2016
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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.
Read the full explanation →NPCI was promoted by the Reserve Bank of India along with which other body?
- A.Securities and Exchange Board of India
- B.Indian Banks Association
- C.NITI Aayog
- D.Ministry of Electronics and Information Technology
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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.
Read the full explanation →The Unified Payments Interface was launched in which year?
- A.2010
- B.2012
- C.2016
- D.2019
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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.
Read the full explanation →UPI was built as a layer on top of which existing payment system?
- A.RTGS
- B.NEFT
- C.IMPS
- D.NACH
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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.
Read the full explanation →In UPI, a virtual payment address is used so that the payer does not have to share which details?
- A.The bank account number and IFSC
- B.The Aadhaar number
- C.The PAN
- D.The mobile handset number
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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.
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