Digital Banking, Payment Systems and Financial Technology
What this domain tests
Channel selection and the rule behind each rail, plus who authorises payment operators and what consumer protections apply to digital transactions.
The payment rails
- NEFT - batch, deferred net settlement, 24×7 including holidays, no minimum or maximum set by RBI (bank caps apply).
- RTGS - real-time gross settlement, minimum ₹2 lakh, no RBI upper limit, 24×7 since December 2020; used for high-value, time-critical transfers.
- IMPS - instant, 24×7, through NPCI, typically up to ₹5 lakh.
- UPI - instant mobile transfer using a virtual payment address; general cap ₹1 lakh per transaction, with higher caps for specified categories such as capital markets and insurance.
- AePS, BBPS, NETC/FASTag, PPIs, cards - NPCI and RBI-authorised ecosystems; every payment system operator needs authorisation under the Payment and Settlement Systems Act, 2007.
Digital safeguards
Two-factor authentication for card-not-present transactions, card tokenisation, Positive Pay for high-value cheques, and RBI's limited-liability framework for unauthorised electronic transactions. Digital lending must disburse directly into the borrower's bank account and disclose the Lending Service Provider and all fees.
Worked example
A corporate must pay ₹5 crore to a supplier before 3 p.m. today. UPI caps make it unsuitable and NEFT settles in batches, so RTGS is correct: it clears in real time, has no RBI ceiling, and is available 24×7.
Traps
Students wrongly think NEFT is closed on holidays (it is 24×7) or that RTGS has an upper limit (it does not). A prepaid instrument is not a bank account. Account Aggregator is an NBFC-AA that shares data with consent; it never sees or stores the data itself.