UPSC Prelims Practice Questions — India and Nepal Launch Cross-Border Remittance Mechanism to Strengthen Bilateral Financial Connectivity

Q1. With reference to the UPI–NPI cross-border remittance mechanism operationalised in June 2026, which one of the following is the Indian entity that executed the technical integration with Nepal Clearing House Limited (NCHL)?

  • A. NPCI International Payments Limited (NIPL)
  • B. Bharat Bill Payment Central Unit (BBPCU)
  • C. Indian Financial Technology and Allied Services (IFTAS)
  • D. Reserve Bank Innovation Hub (RBIH)

Q2. As per the Ministry of Finance announcement on the UPI–NPI cross-border remittance corridor, how many participating banks in India are live on the corridor at launch?

  • A. 12
  • B. 15
  • C. 18
  • D. 21

Q3. The Indo-Nepal Remittance Facility Scheme, conceived as India's first cross-border remittance corridor riding on the NEFT system, was launched by the Reserve Bank of India in which year?

  • A. 2005
  • B. 2008
  • C. 2011
  • D. 2014

Q4. Under the Indo-Nepal Remittance Facility Scheme, the sole designated bank in Nepal authorised to receive funds remitted from India is:

  • A. Nepal Rastra Bank
  • B. Rastriya Banijya Bank
  • C. Nepal SBI Ltd. (NSBL)
  • D. Nepal Clearing House Limited

Q5. Which one of the following best describes the National Payments Corporation of India (NPCI)?

  • A. A statutory body constituted under the Payment and Settlement Systems Act, 2007 to regulate retail payment systems in India.
  • B. A not-for-profit company incorporated under the Companies Act and authorised by the Reserve Bank of India to function as the umbrella organisation for retail payment systems in India.
  • C. A wholly-owned subsidiary of the Reserve Bank of India established to operate large-value settlement systems and government securities clearing.
  • D. An attached office of the Department of Financial Services, Ministry of Finance, that operates India's Digital Public Infrastructure stack.

Q6. Which one of the following entities is specifically mandated to operationalise the global deployment of UPI and RuPay, including bilateral linkages such as the India–Nepal UPI–NPI corridor?

  • A. NPCI International Payments Limited (NIPL)
  • B. Bharat Bill Payment Central Unit (BBPCU)
  • C. Indian Financial Technology and Allied Services (IFTAS)
  • D. Reserve Bank Innovation Hub (RBIH)

Q7. With reference to India's Digital Public Infrastructure (DPI) export strategy as compared to its earlier bilateral digital cooperation, consider the following statements: 1. DigiLocker-specific MoUs have been signed with Cuba, Kenya, the UAE and Lao PDR, whereas UPI has been made operational in more than eight foreign jurisdictions. 2. The G20, during India's Presidency, endorsed voluntary and non-binding policy recommendations on DPI for advancing financial inclusion. 3. India has signed India Stack / DPI cooperation MoUs or agreements with more than fifty countries as of 2025. Which of the statements given above is/are correct?

  1. DigiLocker-specific MoUs have been signed with Cuba, Kenya, the UAE and Lao PDR, whereas UPI has been made operational in more than eight foreign jurisdictions.
  2. The G20, during India's Presidency, endorsed voluntary and non-binding policy recommendations on DPI for advancing financial inclusion.
  3. India has signed India Stack / DPI cooperation MoUs or agreements with more than fifty countries as of 2025.
  • A. 1 only
  • B. 1 and 2 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q8. The India-Nepal Inter-Governmental Committee (IGC) on Trade, Transit and Cooperation to Combat Unauthorised Trade, the apex bilateral mechanism functioning under the India-Nepal Treaty of Trade and Treaty of Transit, is headed on the Indian side by which of the following?

  • A. Foreign Secretary, Ministry of External Affairs
  • B. Commerce Secretary, Department of Commerce
  • C. Secretary, Department of Economic Affairs
  • D. Secretary, Department for Promotion of Industry and Internal Trade

Q9. In the context of India-Nepal financial linkages, the term 'Indo-Nepal Remittance Facility (INRF) Scheme' refers to which one of the following?

  • A. A bidirectional UPI–NPI peer-to-peer corridor allowing real-time remittances in either direction between India and Nepal
  • B. A NEFT-based one-way cross-border remittance scheme launched by the RBI in 2008 for migrant Nepalese workers in India to send funds home
  • C. A swap line between the Reserve Bank of India and Nepal Rastra Bank for settlement of bilateral trade in domestic currencies
  • D. A SAARC-wide remittance corridor operated by NPCI International Payments Limited for Nepalese workers across South Asia

Q10. With reference to cross-border remittance arrangements between India and Nepal, consider the following statements: 1. The Indo-Nepal Remittance Facility Scheme operates through the RBI's NEFT system with a ceiling on the per-transaction value, whereas the UPI–NPI linkage operationalised in 2026 enables real-time peer-to-peer transfers initiated through mobile banking apps. 2. Both the Indo-Nepal Remittance Facility Scheme and the UPI–NPI linkage are implemented by NPCI International Payments Limited (NIPL) as the nodal agency. 3. Unlike the earlier BHIM UPI QR acceptance enabled in Nepal in 2022 which was limited to merchant payments, the 2026 UPI–NPI linkage permits bidirectional person-to-person remittances. Which of the statements given above is/are correct?

  1. The Indo-Nepal Remittance Facility Scheme operates through the RBI's NEFT system with a ceiling on the per-transaction value, whereas the UPI–NPI linkage operationalised in 2026 enables real-time peer-to-peer transfers initiated through mobile banking apps.
  2. Both the Indo-Nepal Remittance Facility Scheme and the UPI–NPI linkage are implemented by NPCI International Payments Limited (NIPL) as the nodal agency.
  3. Unlike the earlier BHIM UPI QR acceptance enabled in Nepal in 2022 which was limited to merchant payments, the 2026 UPI–NPI linkage permits bidirectional person-to-person remittances.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q11. With reference to India's Neighbourhood First policy and the international rollout of the Unified Payments Interface (UPI), consider the following countries: 1. Bhutan 2. Bangladesh 3. Sri Lanka 4. Nepal Which of the above are correctly identified as countries where UPI is currently operational for cross-border payments?

  1. Bhutan
  2. Bangladesh
  3. Sri Lanka
  4. Nepal
  • A. 1 and 3 only
  • B. 2 and 4 only
  • C. 1, 3 and 4 only
  • D. 1, 2, 3 and 4

Q12. As of 2026, BHIM-UPI based cross-border payment acceptance / linkage has been operationalised with several countries. With reference to this, which of the following countries is/are NOT correctly identified as a country with an operational UPI cross-border linkage?

  1. Bhutan
  2. Singapore
  3. Indonesia
  4. Mauritius
  • A. 1 and 3
  • B. 2 and 4
  • C. 1, 2 and 4
  • D. 3 only
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