UPSC Prelims Practice Questions — UPI completes 10 glorious years, Emerges as World’s Largest Real-Time Payments Platform, Anchoring India’s Digital Economy

Q1. In the context of the National Payments Corporation of India (NPCI), which is the operator of UPI, the term 'Section 8 company' most precisely refers to a company that is:

  • A. Incorporated as a not-for-profit entity under the Companies Act, applying its profits solely to promoting its objects and prohibited from paying dividends to members
  • B. Incorporated under the Payment and Settlement Systems Act, 2007 with mandatory majority ownership by the Reserve Bank of India
  • C. A government company in which the Central Government holds at least 51% of the paid-up share capital
  • D. A public financial institution notified by the Central Government to accept public deposits for payment settlement

Q2. Which single authority is statutorily empowered to regulate and oversee UPI as a payment system in India?

  • A. National Payments Corporation of India
  • B. Reserve Bank of India
  • C. Securities and Exchange Board of India
  • D. Department of Financial Services

Q3. UPI was formally launched in April 2016 during the tenure of which of the following as Governor of the Reserve Bank of India?

  • A. D. Subbarao
  • B. Raghuram Rajan
  • C. Urjit Patel
  • D. Shaktikanta Das

Q4. The National Payments Corporation of India was incorporated in 2008 and it launched UPI in 2016. How many years after NPCI's incorporation was UPI launched?

  • A. 6 years
  • B. 7 years
  • C. 8 years
  • D. 10 years

Q5. Which department is the nodal department of the Central Government that steers the operationalisation and expansion of digital-payment initiatives such as UPI?

  • A. Department of Financial Services, Ministry of Finance
  • B. Ministry of Electronics and Information Technology
  • C. Department of Economic Affairs, Ministry of Finance
  • D. Department of Commerce, Ministry of Commerce and Industry

Q6. As highlighted in the release marking UPI's completion of 10 years, which category of transactions constitutes the single largest share of UPI's transaction volume in FY 2025-26?

  • A. Person-to-Person (P2P) transactions
  • B. Person-to-Merchant (P2M) transactions
  • C. Cross-border remittance transactions
  • D. Government-to-Person (G2P) benefit transfers

Q7. With reference to the recognition of UPI by the International Monetary Fund, consider the following statements: 1. In its June 2025 report, the IMF recognised UPI as the world's largest retail fast payment system by transaction volume. 2. UPI processes more than 49 billion transactions every month. 3. As of 2024, UPI accounted for nearly 49% of the world's real-time payment transaction volume. Which of the statements given above is/are correct?

  1. In its June 2025 report, the IMF recognised UPI as the world's largest retail fast payment system by transaction volume.
  2. UPI processes more than 49 billion transactions every month.
  3. As of 2024, UPI accounted for nearly 49% of the world's real-time payment transaction volume.
  • A. 1 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q8. UPI variants such as UPI 123Pay and UPI Lite are developed and operated by which of the following organisations?

  • A. Reserve Bank of India
  • B. National Payments Corporation of India
  • C. Ministry of Electronics and Information Technology
  • D. Small Industries Development Bank of India

Q9. UPI 123Pay enables feature-phone users to transact using how many distinct technology-based alternatives?

  • A. Two
  • B. Three
  • C. Four
  • D. Six

Q10. With reference to recent UPI-related policy measures, consider the following statements: 1. NPCI's cap limiting any single entity to a maximum 30% share of UPI transaction volume applies to Third-Party App Providers (TPAPs). 2. The Incentive Scheme for low-value BHIM-UPI (P2M) transactions for FY 2024-25 covers UPI Person-to-Merchant transactions of value up to Rs 2,000. 3. Under this incentive scheme, an incentive at the rate of 0.15% of transaction value is provided for small-merchant transactions. 4. The 30% market-share cap applies to Payment Service Provider (PSP) banks rather than to app providers. Which of the statements given above are correct?

  1. NPCI's cap limiting any single entity to a maximum 30% share of UPI transaction volume applies to Third-Party App Providers (TPAPs).
  2. The Incentive Scheme for low-value BHIM-UPI (P2M) transactions for FY 2024-25 covers UPI Person-to-Merchant transactions of value up to Rs 2,000.
  3. Under this incentive scheme, an incentive at the rate of 0.15% of transaction value is provided for small-merchant transactions.
  4. The 30% market-share cap applies to Payment Service Provider (PSP) banks rather than to app providers.
  • A. 1, 2 and 3 only
  • B. 2 and 3 only
  • C. 1, 3 and 4 only
  • D. 1, 2, 3 and 4