Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct ?
- (a) UPI is a real-time payment system but Digital Rupee is akin to sovereign paper currency.
- (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.
- (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.
- (d) In both the cases (UPI and Digital Rupee), the liability lies with the users and their respective banks. ✓ UPSC's answer
Why the answer is (d)
• UPI is a real-time payment rail moving money between bank accounts; the Digital Rupee (e₹) is a central bank digital currency — a direct liability of the RBI, the digital form of a banknote — so statement (a) is correct.
• In UPI the payer's account is debited and the payee's credited immediately, which is a settlement between banks; with e₹, tokens simply move from one wallet to another with no interbank settlement, so statement (b) is correct.
• UPI transactions appear in bank statements; e₹ wallet-to-wallet transfers do not, since the money has already left the banking system into the wallet, so statement (c) is correct.
• Statement (d) is not correct: for UPI the liability sits with the banks holding the accounts, but for the Digital Rupee the liability is that of the RBI, not the users' banks.
• Hence the incorrect statement is (d).
Why the other options are wrong
- (a) UPI is a real-time payment system but Digital Rupee is akin to sovereign paper currency.
- This statement is correct: UPI is a payment system while e-rupee is sovereign digital currency.
- (b) In case of UPI, settlement for end users happens instantly as the money gets immediately…
- This statement is correct: e-rupee transfers are wallet-to-wallet without interbank settlement.
- (c) UPI transactions are recorded by banks and reflected in bank statements but in case of…
- This statement is correct: e-rupee transactions do not appear in bank statements.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2026, held on 24 May 2026. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.