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UPSC Prelims 2026 GS Paper 1, question 90

Topic: Economy

Q90

Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct ?

  1. (a) UPI is a real-time payment system but Digital Rupee is akin to sovereign paper currency.
  2. (b) In case of UPI, settlement for end users happens instantly as the money gets immediately debited or credited but in case of Digital Rupee, there is no settlement as the wallet balance gets transferred to another wallet.
  3. (c) UPI transactions are recorded by banks and reflected in bank statements but in case of Digital Rupee, no data is captured in bank statements as transactions are from one wallet to another.
  4. (d) In both the cases (UPI and Digital Rupee), the liability lies with the users and their respective banks.Correct answer

Solution.

Answer: (d) In both the cases (UPI and Digital Rupee), the liability lies with the users and their respective banks.

  1. UPI is an instant inter-bank payment routing interface where balances remain commercial bank liabilities, whereas the Digital Rupee (CBDC / e-Rupee) is legal tender issued by the Reserve Bank of India in digital form.
  2. Statement (d) is not correct because the Digital Rupee is a direct sovereign liability of the Reserve Bank of India (on the RBI's balance sheet), not a liability of commercial banks or users.