Q. Consider the following statements:
- National Payments Corporation of India (NPCI) helps in promoting financial inclusion in the country.
- NPCI has launched RuPay, a card payment scheme.
Which of the statements given above is/are correct? (UPSC Prelims 2017)
Answer:
Both 1 and 2
Notes: The correct answer is
[C] Both 1 and 2. The National Payments Corporation of India (NPCI) has become the backbone of the digital retail payment system in India since its inception in 2008.Detailed Analysis of the Statements:
- Financial Inclusion (Statement 1 – Correct):NPCI is a specialized division of the Reserve Bank of India (under the Ministry of Finance) created to operate retail payments and settlement systems. It plays a pivotal role in financial inclusion through initiatives like:
- AePS (Aadhaar Enabled Payment System): Allows people in rural areas to withdraw or deposit money using their Aadhaar number and fingerprint at micro-ATMs.
- UPI (Unified Payments Interface): Revolutionized small-value digital payments, making banking accessible to millions via smartphones.
- Direct Benefit Transfer (DBT): Facilitates the seamless transfer of government subsidies directly into the bank accounts of beneficiaries.
- RuPay Card Scheme (Statement 2 – Correct):NPCI launched RuPay in 2012 as India’s indigenous card payment network (similar to Visa or Mastercard). It was a strategic move to reduce the cost of electronic payments for banks and consumers. RuPay was significantly boosted by the Pradhan Mantri Jan Dhan Yojana (PMJDY), where millions of first-time bank account holders were issued RuPay debit cards, further driving financial inclusion.
Key Products under the NPCI Umbrella:| Product | Primary Purpose |
| UPI | Instant real-time mobile payments. |
| RuPay | Domestic card scheme for ATMs, POS, and E-commerce. |
| IMPS | 24/7 instant interbank electronic fund transfer. |
| BHIM | A unified app for UPI-based transactions. |
| NETC (Fastag) | Electronic toll collection on highways. |
Why NPCI is Unique? It is a "not-for-profit" company (under Section 8 of the Companies Act, 2013) promoted by a consortium of major banks in India. Its primary goal is to provide a safe, secure, and affordable payment infrastructure for the entire nation, rather than maximizing profit.