UPSC Prelims Practice Questions — SC questions govt.’s power to levy UPI merchant fees

Q1. With reference to the Merchant Discount Rate (MDR) on digital payments, consider the following statements: Which of the statements given above is/are correct?

  1. The MDR is borne by the merchant and is paid to the bank or intermediary that provides the payment-acceptance infrastructure.
  2. Since the MDR is usually a percentage of transaction value, the absolute charge on a single payment rises with the size of that payment.
  3. Compared with a flat charge per transaction, a percentage MDR places a proportionately heavier burden on small-value payments.
  • A. 1, 2 and 3
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1 and 3 only

Q2. With reference to the institutional arrangement for retail payment systems in India, consider the following statements: Which of the statements given above is/are correct?

  1. NPCI is an umbrella organisation owned by banks and authorised by the RBI to operate retail payment systems such as UPI and IMPS.
  2. Being the operator of UPI, NPCI is not bound by the operational and technical standards laid down by the RBI.
  3. The RBI itself operates UPI, while NPCI regulates the banks that participate in it.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 1 only
  • D. 2 and 3 only

Q3. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The zero-MDR regime for RuPay debit cards and BHIM-UPI transactions, in force since January 2020, was brought in through amendments to Acts of Parliament.
  2. The RBI is empowered under the Payment and Settlement Systems Act, 2007 to regulate and oversee payment systems in India.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q4. With reference to delegated (subordinate) legislation in India, consider the following statements: Which of the statements given above is/are correct?

  1. Rules framed under an Act cannot enlarge the Act's scope by imposing obligations on classes of persons that the Act itself does not cover.
  2. Once laid before Parliament, subordinate legislation becomes immune from judicial review on the ground that it is ultra vires.
  3. Parliament may leave the filling-in of details to the executive only if the Act itself lays down the legislative policy.
  4. A parliamentary committee examines whether powers delegated by Parliament to make rules and regulations are being properly exercised.
  • A. 1, 2, 3 and 4
  • B. 1 and 3 only
  • C. 2 and 4 only
  • D. 1, 3 and 4 only