UPSC Prelims Practice Questions — DFS, M/o Finance releases Report titled “Socio-Economic Impact Analysis of Incentive Scheme for Promotion of RuPay Debit Card and low-value BHIM-UPI Transactions (P2M)” at Chintan Shivir 2026
Q1. The zero-Merchant Discount Rate (MDR) framework for RuPay Debit Card and BHIM-UPI is sustained through an incentive scheme that compensates banks for lost revenue. Which department is the nodal authority that administers this incentive scheme?
- A. Department of Financial Services, Ministry of Finance
- B. Department of Economic Affairs, Ministry of Finance
- C. Ministry of Electronics and Information Technology
- D. Department for Promotion of Industry and Internal Trade
Q2. Consider the following statements regarding the statutory basis for making the Merchant Discount Rate (MDR) zero on RuPay Debit Card and BHIM-UPI transactions:
1. Section 10A was inserted into the Payment and Settlement Systems Act, 2007 to bar prescribed payment systems from imposing MDR.
2. Section 269SU of the Income-tax Act, 1961 requires every business, irrespective of its turnover, to provide the facility for accepting payment through prescribed electronic modes.
3. The zero-MDR mandate for RuPay Debit Card and BHIM-UPI took effect from January 2020.
Which of the statements given above is/are correct?
- Section 10A was inserted into the Payment and Settlement Systems Act, 2007 to bar prescribed payment systems from imposing MDR.
- Section 269SU of the Income-tax Act, 1961 requires every business, irrespective of its turnover, to provide the facility for accepting payment through prescribed electronic modes.
- The zero-MDR mandate for RuPay Debit Card and BHIM-UPI took effect from January 2020.
- A. 1 and 3 only
- B. 2 and 3 only
- C. 1 and 2 only
- D. 1, 2 and 3
Q3. What was the estimated financial outlay of the Incentive Scheme for promotion of low-value BHIM-UPI (P2M) transactions for FY 2024-25, as approved by the Union Cabinet?
- A. Rs. 1,500 crore
- B. Rs. 1,300 crore
- C. Rs. 2,600 crore
- D. Rs. 3,631 crore
Q4. With reference to the FY 2024-25 Incentive Scheme for promotion of low-value BHIM-UPI (P2M) transactions, consider the following features:
1. An incentive at the rate of 0.15% per transaction value.
2. Coverage limited to UPI (P2M) transactions up to Rs. 2,000 for small merchants.
3. Disbursal of 80% of the admitted claim amount to acquiring banks without any conditions.
4. Inclusion of RuPay Debit Card transactions of all values under the scheme.
Which of the above is/are correctly identified as features of the scheme?
- An incentive at the rate of 0.15% per transaction value.
- Coverage limited to UPI (P2M) transactions up to Rs. 2,000 for small merchants.
- Disbursal of 80% of the admitted claim amount to acquiring banks without any conditions.
- Inclusion of RuPay Debit Card transactions of all values under the scheme.
- A. 1, 2 and 3
- B. 1, 2 and 4
- C. 2, 3 and 4
- D. 1 and 4
Q5. With how many core promoter banks was the National Payments Corporation of India (NPCI) originally set up in December 2008?
Q6. With reference to the National Payments Corporation of India (NPCI), consider the following statements:
1. It is registered as a not-for-profit company under Section 8 of the Companies Act.
2. It was set up with the support of the Reserve Bank of India and the Indian Banks' Association.
3. It operates retail payment systems including UPI, RuPay and FASTag.
4. It is a statutory body established directly by the Payment and Settlement Systems Act, 2007.
Which of the statements given above is/are NOT correct?
- It is registered as a not-for-profit company under Section 8 of the Companies Act.
- It was set up with the support of the Reserve Bank of India and the Indian Banks' Association.
- It operates retail payment systems including UPI, RuPay and FASTag.
- It is a statutory body established directly by the Payment and Settlement Systems Act, 2007.
- A. 4 only
- B. 1 only
- C. 2 and 3 only
- D. 1 and 4
Q7. According to the Socio-Economic Impact Analysis report released at Chintan Shivir 2026, the number of deployed UPI QR codes rose from 9.3 crore to approximately how many?
- A. About 65.8 crore
- B. About 33 crore
- C. About 46 crore
- D. About 216 crore
Q8. With reference to the Socio-Economic Impact Analysis report released by DFS at Chintan Shivir 2026, consider the following statements:
1. Among surveyed users, UPI accounted for 57% of transactions, exceeding cash at 38%.
2. Deployed UPI QR codes expanded from 9.3 crore to about 65.8 crore.
3. Adoption of UPI among users in the 18-25 age group stood at 66%.
4. The study was conducted solely by NPCI as an internal evaluation.
Which of the statements given above is/are NOT correct?
- Among surveyed users, UPI accounted for 57% of transactions, exceeding cash at 38%.
- Deployed UPI QR codes expanded from 9.3 crore to about 65.8 crore.
- Adoption of UPI among users in the 18-25 age group stood at 66%.
- The study was conducted solely by NPCI as an internal evaluation.
- A. 4 only
- B. 1 only
- C. 2 and 3 only
- D. 3 and 4
Q9. As per NPCI, what is the maximum Merchant Discount Rate (MDR) that was applicable on UPI Person-to-Merchant (P2M) transactions before it was made zero for BHIM-UPI?
- A. Up to 0.30%
- B. Up to 0.15%
- C. Up to 0.60%
- D. Up to 0.90%
Q10. In the context of the RuPay and BHIM-UPI incentive scheme, the term 'P2M transaction' refers to which one of the following?
- A. A payment made by a customer to a business or merchant for goods or services
- B. A transfer of funds between two individual account holders
- C. An inter-bank settlement transaction routed through the acquiring bank
- D. A merchant's periodic settlement of pooled receipts with the payment aggregator
Q11. Consider the following subjects and their attribution to the Department of Financial Services (DFS), Ministry of Finance:
1. Regulation of the National Pension System and matters relating to the PFRDA.
2. Legislation relating to payment and settlement systems and non-banking financial companies.
3. Management of India's external commercial borrowings and foreign exchange policy.
4. Matters relating to public sector banks and public sector insurance companies.
Which of the above is/are correctly identified as falling under the DFS mandate?
- Regulation of the National Pension System and matters relating to the PFRDA.
- Legislation relating to payment and settlement systems and non-banking financial companies.
- Management of India's external commercial borrowings and foreign exchange policy.
- Matters relating to public sector banks and public sector insurance companies.
- A. 1, 2 and 4
- B. 1, 3 and 4
- C. 2, 3 and 4
- D. 1 and 3
Q12. Consider the following statements about the launch of digital payment products in India:
1. The BHIM app was launched in December 2016.
2. The Unified Payments Interface (UPI) was launched in 2016.
3. The RuPay card network was launched by NPCI in 2012.
4. The National Common Mobility Card (One Nation One Card) was launched in 2016.
Which of the statements given above is/are correct?
- The BHIM app was launched in December 2016.
- The Unified Payments Interface (UPI) was launched in 2016.
- The RuPay card network was launched by NPCI in 2012.
- The National Common Mobility Card (One Nation One Card) was launched in 2016.
- A. 1, 2 and 3
- B. 1, 2 and 4
- C. 2, 3 and 4
- D. 1 and 4