Which one of the following statements about Unified Payments Interface (UPI) and Central Bank Digital Currency (Digital Rupee) is not correct?

The critical difference between UPI and the Digital Rupee (e₹) lies in who holds the ultimate financial liability.

UPI Liability: UPI is a payment channel that moves commercial bank money. When you hold money in a UPI-linked bank account, that money is technically a debt the bank owes you. Therefore, the financial liability lies with that specific commercial bank. If the bank fails, your deposit is at risk (beyond deposit insurance limits).

Digital Rupee (CBDC) Liability: The Digital Rupee is a digital form of legal tender issued directly by the central bank. It is not a deposit in a commercial bank account. Instead, it represents a direct liability of the Reserve Bank of India (RBI), exactly like physical paper currency notes. If you hold a Digital Rupee in your digital wallet, the central bank guarantees its value, completely bypassing commercial bank risk.

Why the other statements are correct:

(a) is correct: UPI is an electronic fund transfer overlay system built on top of the banking infrastructure. The Digital Rupee, however, is a sovereign currency itself—it is legal tender in digital blocks rather than paper notes.

(b) is correct: UPI requires an instantaneous clearing and interbank settlement process behind the scenes to move funds from Bank A to Bank B. In contrast, Digital Rupee transactions are instant, final settlements by themselves. When tokens move from Wallet A to Wallet B, the absolute asset changes hands directly; there is no secondary interbank ledger that needs to reconcile.

(c) is correct: Because UPI transfers are bank-to-bank ledger adjustments, every transaction appears on your traditional bank passbook/statement. Digital Rupee transfers take place anonymously or semi-anonymously through cryptographic wallets, leaving no footprints on your standard savings bank account statement.