INDEX
REFERENCE WITH UPSC-CSE SYLLABUS
- WHY IN NEWS
- ABOUT
- BACKGROUND
- HOW IT WORK
- WHO CAN GENERATE VOUCHERS
- KEY POINTS
- RBI STATEMENT
- HOW IT IS DIFFERENT FROM DIGITAL CURRENCY
- SIGNIFICANCE
- CHALLENGES
- CONCLUSION
- EXPECTED PRELIMS QUESTIONS
EXPECTED MAINS QUESTIONS
REFERENCE WITH UPSC-CSE SYLLABUS
- General Studies-III
- Awareness in the fields of IT, Space, Computers, Robotics, Nano-technology, Bio-technology, and issues relating to Intellectual Property Rights.
- Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development, and Employment.
WHY IN NEWS
- Launched by the Prime Minister e-RUPI which is a person and purpose-specific digital payment solution.
ABOUT
- For digital payment, e-RUPI is a cashless, prepaid, and contactless instrument.
- Purpose-specific and person-specific payments system.
BACKGROUND
- The National Health Authority and the National Payments Corporation of India (NPCI), Department of Financial Services, Ministry of Health and Family Welfare has developed it.
- Under their employee welfare and corporate social responsibility programs, private sector can also leverage these digital vouchers
HOW IT WORK
- It is delivered to the mobile of the beneficiaries as a QR code or SMS string-based e-Voucher.
- Without a card, digital payments app, or internet banking access, at the service provider users will be able to redeem the voucher of this seamless one-time payment mechanism
- Without any credit or debit card, mobile app, or internet banking it will be like a prepaid gift-voucher that can be redeemed at specific accepting centers.
WHO CAN GENERATE VOUCHERS
- Along their partner banks any government agency and corporation can generate.
- These banks have come on board as partners:
Punjab National Bank, Bank of Baroda, State Bank of India, HDFC Bank, Axis Bank, Canara Bank, IndusInd Bank, and ICICI Bank.
KEY POINTS
- It will connect sponsors of the services with beneficiaries and service providers digitally without any physical interface.
- It is pre-paid in nature so timely payment and no intermediary involvement.
- Only after the transaction is completed it also ensures that the payment to the service provider is made
- US, Colombia, Chile, Sweden, Hong Kong, etc. already are using the voucher system
- With the details of specific persons and the purpose for which payments have to be made any corporate or government agency will have to approach the partner banks, which are both private and public-sector lenders.
- Using a voucher and their mobile number allocated by a bank to the service provider in the name of a given person would only be delivered to that person this way the beneficiaries will be identified.
- Cryptocurrencies and e-RUPI both do not rely on middlemen.
RBI STATEMENT
- RBI Deputy Governor had said earlier before its launch that they were working towards a phased implementation strategy of the Central Bank Digital Currency (CBDC), instigation words of e-RUPI’s links to the CBDC.
HOW IT IS DIFFERENT FROM DIGITAL CURRENCY
- Without any discrepancies and delay to ensure the reach of particular benefits to the eligible beneficiaries is its objective.
- It is government-controlled.
- It is a social service voucher system not a digital currency.
- It can be said that it is the first step towards launching digital currency in India.
SIGNIFICANCE
- It is a leak-proof delivery of welfare services
- As the underlying asset, it is backed by the existing Indian rupee
- It is different from a virtual currency specificity of its purpose puts it closer to a voucher-based payment system.
- Schemes that are meant to provide, drugs & diagnostics under schemes such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, fertilizer subsidies, drugs & nutritional support under Mother and Child welfare schemes and TB eradication programs this platform will be used to deliver services.
CHALLENGES
The beneficiary not required to disclose their identity, so it can be claimed by other people.
CONCLUSION
- The government claim it to be easy, safe and secure.
- But its future will depend on the end-use cases.
EXPECTED PRELIMS QUESTIONS
Q1. Consider the following statement regarding e-RUPI
(a) Developed by the RBI
(b) It is a leak-proof delivery of welfare services.
Which of the following statement is correct?
(1) a only
(2) b only
(3) Both a and b
(4) Neither a nor b
SOLUTION
STATEMENT A is incorrect because The National Health Authority and the National Payments Corporation of India (NPCI), Department of Financial Services, Ministry of Health and Family Welfare has developed it.
STATEMENT B is correct because it is a leak-proof delivery of welfare services.
Q2. Consider the following statement regarding e-RUPI
(a) It is delivered to the mobile of the beneficiaries as a QR code or SMS string-based e-Voucher
(b) It is different from a virtual currency specificity of its purpose puts it closer to a voucher-based payment system.
Which of the following statement is incorrect?
(1) a only
(2) b only
(3) Both a and b
(4) Neither a nor b
SOLUTION
STATEMENT A is correct because it is delivered to the mobile of the beneficiaries as a QR code or SMS string-based e-Voucher
STATEMENT B is correct because It is different from a virtual currency specificity of its purpose puts it closer to a voucher-based payment system.
Q3. Consider the following statement regarding e-RUPI
(a) Without any physical interface it will connect sponsors of the services with beneficiaries and service providers digitally
(b) It is a leak-proof delivery of welfare services.
Which of the following statement is incorrect?
(1) a only
(2) b only
(3) Both a and b
(4) Neither a nor b
SOLUTION
STATEMENT A is correct because without any physical interface it will connect sponsors of the services with beneficiaries and service providers digitally
STATEMENT B is correct because it is a leak-proof delivery of welfare services.
EXPECTED MAINS QUESTIONS
Q. What is the significance of E-RUPI in the Indian payment system? Critically analyse
Sources used:
The Hindu,The Indian Express, British Broadcasting Corporation News, Press Trust of India, Business Standard, The Economic Times