New 55% Off on All Courses - Enroll Now! Click Here

    Question

    Which of the following statements accurately reflects

    the recent draft circular proposed by the Reserve Bank of India (RBI) regarding digital payments?
    A The new draft circular proposes the elimination of authentication for all transactions to simplify digital payments. Correct Answer Incorrect Answer
    B The draft circular mandates a single authentication factor for transactions under ₹15,000 and exempts transactions over ₹1 lakh from this requirement. Correct Answer Incorrect Answer
    C The RBI draft circular requires an additional authentication factor that must be dynamic and used only once, with exemptions for specific types of transactions. Correct Answer Incorrect Answer
    D The draft circular suggests that all digital payments should be processed without customer consent for new authentication factors. Correct Answer Incorrect Answer
    E The proposal includes exempting all insurance premiums from the new authentication requirements, regardless of the amount. Correct Answer Incorrect Answer

    Solution

    The RBI's draft circular aims to enhance digital-payment security by proposing an additional authentication factor that must be robust, dynamically created, and used only once. However, it exempts certain transactions, such as contactless card transactions below ₹5,000 and insurance premiums, from this requirement. The proposal also emphasizes the need for customer consent and outlines due diligence procedures for Aadhar-enabled Payment System (AePS) touchpoint operators, ensuring ongoing compliance with existing regulations.

    Practice Next

    Relevant for Exams: