UPSC Prelims Practice Questions — Favara-UPI Cross-Border Payment Corridor Goes Live Between Maldives and India

Q1. Consider the following statements comparing the international presence of the Unified Payments Interface (UPI) before and after the Favara-UPI corridor: 1. Before the Maldives linkage, France was the only country outside Asia among those where UPI was live. 2. After the Maldives linkage, the countries where UPI is live/linked include Qatar and the United Arab Emirates in West Asia. 3. Unlike the launches in Sri Lanka and Mauritius, which were jointly inaugurated at the level of Heads of Government, the go-live of the Maldives corridor was announced by the Maldivian central banking authority. Which of the statements given above is/are correct?

  1. Before the Maldives linkage, France was the only country outside Asia among those where UPI was live.
  2. After the Maldives linkage, the countries where UPI is live/linked include Qatar and the United Arab Emirates in West Asia.
  3. Unlike the launches in Sri Lanka and Mauritius, which were jointly inaugurated at the level of Heads of Government, the go-live of the Maldives corridor was announced by the Maldivian central banking authority.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q2. Which one of the following statements regarding the international expansion of the Unified Payments Interface is correct?

  • A. Every country in which UPI is live has linked its own domestic fast payment system to UPI on a system-to-system basis.
  • B. The linkage of UPI with Singapore's PayNow was launched in February 2023 by the central banking authorities of the two countries.
  • C. UPI services abroad are available exclusively to Indian citizens who hold accounts with banks located in India.
  • D. All cross-border linkages of UPI permit the transfer of funds in both directions from the date on which they go live.

Q3. Consider the following statements about the institutions involved in the Favara-UPI corridor and in earlier UPI linkages: 1. NPCI International Payments Limited, a wholly-owned subsidiary of the National Payments Corporation of India, was among the entities that built the corridor. 2. The Maldives Monetary Authority is both the central bank of the Maldives and the operator of Favara, just as the Reserve Bank of India is the direct operator of UPI in India. 3. The counterpart of the Reserve Bank of India in the earlier UPI linkage with Singapore was the Monetary Authority of Singapore. Which of the statements given above is/are correct?

  1. NPCI International Payments Limited, a wholly-owned subsidiary of the National Payments Corporation of India, was among the entities that built the corridor.
  2. The Maldives Monetary Authority is both the central bank of the Maldives and the operator of Favara, just as the Reserve Bank of India is the direct operator of UPI in India.
  3. The counterpart of the Reserve Bank of India in the earlier UPI linkage with Singapore was the Monetary Authority of Singapore.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q4. At the go-live of the Favara-UPI corridor, how many partner banks in the Maldives were enabled to route transfers over it?

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

Q5. In the context of the Favara-UPI corridor that became operational in July 2026, 'Phase 1' of the corridor denotes which one of the following?

  • A. Scan-and-pay transactions by Indian travellers at merchant establishments in the Maldives using quick response codes displayed by merchants
  • B. Acceptance of cards issued under the RuPay network at automated teller machines and point-of-sale terminals located in the Maldives
  • C. Transfers initiated by individuals in Maldivian rufiyaa and credited in Indian rupees to UPI-enabled bank accounts held in India
  • D. Settlement of bilateral merchandise trade between the two countries in their respective local currencies through designated vostro accounts

Q6. The bilateral agreement enabling the integration of Favara with the Unified Payments Interface was signed in which year?

  • A. 2023
  • B. 2024
  • C. 2025
  • D. 2026

Q7. Consider the following statements about the components of India's Digital Public Infrastructure: 1. As of March 2026, the number of DigiLocker users exceeded the number of Aadhaar numbers generated. 2. Nearly 55.49 crore users had been onboarded on UPI as of June 2026. 3. In January 2026, more than 650 banks were live on the UPI platform. Which of the statements given above is/are correct?

  1. As of March 2026, the number of DigiLocker users exceeded the number of Aadhaar numbers generated.
  2. Nearly 55.49 crore users had been onboarded on UPI as of June 2026.
  3. In January 2026, more than 650 banks were live on the UPI platform.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q8. Which one of the following statements about the operation of the Unified Payments Interface within India is correct?

  • A. It is operated by the Reserve Bank of India through its Department of Payment and Settlement Systems, which also issues cards under the RuPay network.
  • B. It is operated by the Ministry of Electronics and Information Technology through the Digital India Corporation, which also runs the DigiLocker platform.
  • C. It is operated by NPCI International Payments Limited, which is also the settlement agency for domestic retail payments in India.
  • D. It is operated by the National Payments Corporation of India, an umbrella organisation for retail payments in the country.

Q9. Favara, the instant payment system of the Maldives now linked to UPI, is operated by which one of the following?

  • A. The Ministry of Finance of the Maldives, which administers the country's public financial management systems
  • B. The Maldives Monetary Authority, which is the central banking institution of the country
  • C. Bank of Maldives Plc, which is the largest commercial bank operating in the country
  • D. The Capital Market Development Authority, which regulates securities markets in the country

Q10. In the India-Maldives Vision for a Comprehensive Economic and Maritime Security Partnership, the launch of the RuPay card in the Maldives was welcomed principally as a measure that would

  • A. allow nationals of the Maldives to make card-based payments at merchant establishments located in India
  • B. enable banks of the two countries to settle their bilateral trade obligations in their respective local currencies
  • C. enhance the ease of payments for Indian tourists travelling to the Maldives
  • D. permit Maldivian workers employed in India to remit their earnings home through formal banking channels

Q11. Under the UPI-PayNow linkage between India and Singapore, how many Indian banks are enabled to send outward remittances?

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