Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct?
UPI is a real-time payment system but Digital Rupee is akin to sovereign paper currency.
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.
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.
In both the cases (UPI and Digital Rupee), the liability lies with the users and their respective banks.
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Correct Answer: D — In both the cases (UPI and Digital Rupee), the liability lies with the users and their respective banks.
Explanation:
The question asks for the statement that is not correct. Statements 1, 2, and 3 fit the usual distinction between account-based UPI transfers and wallet-based retail CBDC transfers. Statement 4 is rejected because Digital Rupee is a liability of the central bank, not simply of users and their respective banks in the same way as UPI-linked bank balances.