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Q55 (IAS/2026) Economy › Money, Banking & Inflation Official Key

Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct?

Result
Your answer: —  ·  Correct: D

Explanation

Option D is the incorrect statement (and thus the correct answer).

The Unified Payments Interface (UPI) is a payment system that facilitates the transfer of money between commercial bank accounts. In the case of UPI, the money transferred is commercial bank money, and the liability lies with the respective commercial banks.

In contrast, the Central Bank Digital Currency (CBDC), or Digital Rupee, is a digital form of sovereign currency issued by the Reserve Bank of India (RBI). Just like physical fiat currency (cash), the Digital Rupee is a direct liability of the central bank (RBI), not the commercial banks or the users.

Statements A, B, and C are correct. The Digital Rupee acts as a digital bearer instrument (akin to paper currency) where wallet-to-wallet transfers represent final settlement without backend inter-bank settlement. Furthermore, individual CBDC wallet transactions are not recorded in standard bank account statements, preserving a cash-like nature.

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SIMILAR QUESTIONS

IAS · 2017 · Q43 Relevance score: 2.10

Which of the following is a most likely consequence of implementing the ‘Unified Payments Interface (UPI)’?

IAS · 2023 · Q72 Relevance score: 1.68

With reference to Central Bank digital currencies, consider the following statements : 1. It is possible to make payments in a digital currency without using US dollar or SWIFT system. 2. A digital currency can be distributed with a condition programmed into it such as a time-frame for spending it. Which of the statements given above is/are correct?

IAS · 2024 · Q3 Relevance score: 0.46

Consider the following statements in respect of the digital rupee : 1. It is a sovereign currency issued by the Reserve Bank of India (RBI) in alignment with its monetary policy. 2. It appears as a liability on the RBI's balance sheet. 3. It is insured against inflation by its very design. 4. It is freely convertible against commercial bank money and cash. Which of the statements given above are correct ?

CDS-I · 2018 · Q55 Relevance score: 0.34

Which of the following statements about the India Post Payments Bank (IPPB) is/are correct? 1. It has been incorporated as a Public Limited Company. 2. It started its operation by establishing two pilot branches at Hyderabad and Varanasi. Select the correct answer using the code given below.

IAS · 2018 · Q28 Relevance score: 0.34

With reference to digital payments, consider the following statements : 1. BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account. 2. While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication. Which of the statements given above is/are correct ?