MCQ
Payment Systems MCQ - Practice Questions with Answers
Solve 98 Payment Systems questions for RAS/RPSC preparation.
Practice questions
Q1With reference to the National Electronic Funds Transfer (NEFT) system, consider the following statements: 1. NEFT is owned and operated by the Reserve Bank of India. 2. NEFT is available round the clock on all days of the year. 3. NEFT transactions are processed continuously on a transaction-by-transaction basis throughout the day. Which of the statements given above are correct?
Statements 1 and 2 are correct. NEFT is a nationwide centralised system owned and operated by RBI and is available 24x7x365. Statement 3 is incorrect because NEFT presently operates in half-hourly batches, unlike RTGS continuous transaction-by-transaction processing.
Q2With reference to Immediate Payment Service (IMPS) and UPI, consider the following statements: 1. IMPS is operated by the Reserve Bank of India as a centralised payment system. 2. IMPS is a 24x7 instant domestic funds-transfer facility for interbank electronic transfer. 3. In UPI, customer funds are first stored in a prepaid wallet before every payment is made. 4. For every UPI payment, the customer has to confirm the transaction by entering the MPIN. Which of the statements given above are correct?
Statements 2 and 4 are correct. Statement 1 is incorrect because IMPS is facilitated by NPCI, not operated by RBI as NEFT/RTGS are. Statement 3 is incorrect because UPI transfers funds directly between bank accounts; the source contrasts this with wallets that require loading money first.
Q3With reference to NEFT on a 24x7 basis, consider the following statements: 1. RBI decided that the 24x7 NEFT facility would be made available from 16 December 2019. 2. NEFT has 48 half-hourly batches every day. 3. The last NEFT batch ends at 20:00 hours every day. Which of the statements given above are correct?
Statements 1 and 2 are correct: RBI made 24x7 NEFT available from 16 December 2019, with 48 half-hourly batches each day. Statement 3 is incorrect because the last batch ends at 00:00 hours, not 20:00 hours.
Q4Consider the following statements about NEFT details and limits: 1. IFSC is an 11-digit alpha-numeric code in which the first four characters identify the bank and the last six identify the branch. 2. Cash remittances through NEFT by walk-in customers are allowed without any maximum amount. 3. Outbound remittances through NEFT are permitted only to Nepal under the Indo-Nepal Remittance Facility Scheme. Which of the statements given above are correct?
Statements 1 and 3 are correct: RBI explains the IFSC structure and says outbound NEFT is allowed only for Nepal under the specified scheme. Statement 2 is false because cash remittances by walk-in customers are restricted to a maximum of Rs 50,000 per transaction.
Q5With reference to settlement finality under the PSS Act, 2007, consider the following statements: 1. The Act legally recognises settlement finality. 2. A settlement may be final and irrevocable whether it is gross or net. 3. Insolvency of a system participant automatically reverses every settlement that had already become final and irrevocable. Which of the statements given above are correct?
Statements 1 and 2 are correct: the PSS Act recognises settlement finality, and a gross or net settlement can be final and irrevocable. Statement 3 is incorrect: once settlement has become final and irrevocable, insolvency or winding-up of a participant does not allow another law to affect it.
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6Consider the following statements about the meaning of a payment system under the PSS Act, 2007: 1. It enables payment to be effected between a payer and a beneficiary. 2. A stock exchange is included within the definition of a payment system. 3. Systems enabling credit card, debit card and smart card operations are included in the explanation to the definition. Which of the statements given above are correct?
7Consider the following statements about RBI's Centralised Payment Systems access framework: 1. Existing non-bank entities with CPS access include standalone primary dealers, CCIL, NPCI, NABARD, EXIM Bank and DICGC. 2. Non-bank PSPs with direct CPS membership are permitted to sponsor banks or PSPs as sub-members in CPS. 3. Direct CPS participation can enable access neutrality between banks and non-banks. 4. For non-bank PSPs, the type of RTGS membership is decided by RBI based on the type of transactions they handle. Which of the statements given above are correct?
8With reference to foreign entities and payment systems under the PSS Act, 2007, consider the following statements: 1. The PSS Act, 2007 prohibits foreign entities from operating a payment system in India. 2. Domestic and foreign entities both need RBI authorisation before commencing payment-system operations in India. 3. RBI's FAQ gives examples of foreign card networks and cross-border remittance service providers authorised under the PSS Act. 4. The PSS Act places no restriction on the types of payment systems or services a foreign entity can provide, subject to the legal framework of India. Which of the statements given above are correct?
9Consider the following statements about RTGS availability and limits: 1. RTGS has been available 24x7x365 with effect from 14 December 2020. 2. RBI places no upper or maximum ceiling on RTGS transactions. 3. Future-value-dated transactions are accepted under RTGS. Which of the statements given above are correct?
10Consider the following statements about the Bharat Bill Payment System Directions, 2024: 1. They became applicable from 1 April 2023. 2. They apply to NBBL and all Bharat Bill Payment Operating Units. 3. BBPS enables bill payment or collection through multiple channels and modes, including UPI, internet banking, cards, cash and PPIs. 4. BBPS transactions do not require the bill to be fetched before payment initiation. Which of the statements given above are correct?
11With reference to Unified Payments Interface (UPI), consider the following statements: 1. UPI is a fast payment system that enables customers to make round-the-clock payments instantly using a Virtual Payment Address created by the customer. 2. UPI supports both person-to-person and person-to-merchant payments, and it can be used to send or receive money. 3. Under UPI, money is transferred directly from one bank account to another bank account, unlike a wallet that first requires loading money. 4. UPI can be used only for person-to-person payments and not for merchant payments. Which of the statements given above are correct?
12Consider the following statements about RTGS: 1. RTGS payments are final and irrevocable because settlement occurs in RBI's books. 2. RBI sets an upper ceiling of ₹2,00,000 for RTGS transfers. 3. RTGS is available on all days on a 24x7x365 basis. 4. RTGS became available 24x7x365 with effect from 16 December 2019. Which of the statements given above are correct?
13With reference to the effect of direct access to RBI's Centralised Payment Systems for a fintech, consider the following statements: 1. It can eliminate routing through a sponsor bank as a sub-member. 2. It can reduce transaction costs for the firm. 3. It increases settlement-finality risk linked to intermediary routing. Which of the statements given above are correct?
14Consider the following statements about the Payment and Settlement Systems Act, 2007: 1. It provides for regulation and supervision of payment systems in India. 2. It designates the Reserve Bank of India as the authority for regulation and supervision of payment systems. 3. It excludes the legal basis for netting and settlement finality. Which of the statements given above are correct?
15With reference to availability and settlement batches of NEFT, consider the following statements: 1. RBI decided to make 24x7 NEFT available from December 16, 2019. 2. There are 48 half-hourly batches every day. 3. The system is unavailable on bank holidays. Which of the statements given above are correct?