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Economy question from JKAS Prelims, 2022 by JKPSC

Consider the following statements about National Payments Corporation of India (NPCI):

1. It is a "Not for Profit" company under the provisions of Section 8 of Companies Act, 2013.
2. It is set up to provide infrastructure to the entire banking system in India for physical as well as electronic payment and settlement systems.
3. National Financial Switch (NFS) and Cheque Truncation System (CTS) are the flagship products of NPCI.

Which of the above statements is/are correct?

Last updated May 13, 2026
Correct Answer: Option D — 1, 2 and 3
All three statements accurately reflect the structure and role of the NPCI:

Statement 1 is correct: The NPCI was established as a "Not for Profit" company under Section 25 of the Companies Act 1956 (which corresponds to Section 8 of the Companies Act 2013). It is an initiative of the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA).

Statement 2 is correct: It acts as an umbrella organization for operating retail payments and settlement systems in India. Its mandate is to provide a robust infrastructure to the entire banking system, covering both physical (like cheques) and electronic (like UPI and IMPS) payment methods.

Statement 3 is correct: While UPI is the most famous product today, National Financial Switch (NFS) (the network of shared ATMs) and Cheque Truncation System (CTS) (the electronic image-based clearing of cheques) are foundational flagship products managed by the NPCI that revolutionized banking operations in India.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
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JKPSC JKAS 2022 Prelims

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Exam JKPSC
Recruitment JKAS
Stage Prelims
Year 2022
Subject Economy
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