Previous Year Question
Which one of the following links all the ATMs in India?
Indian Banks’ Association
National Securities Depository Limited
National Payments Corporation of India
Reserve Bank of India
Correct Answer: C
Detailed Solution
The National Payments Corporation of India, or NPCI, is a principal institution established for operating retail payment and settlement systems in India. It is authorised and regulated by the RBI as a Payment System Operator under the Payment and Settlement Systems Act, 2007.
NPCI operates the National Financial Switch (NFS). NFS is a shared network connecting participating banks and ATM networks. It enables the customer of one bank to use permitted services at the ATM of another participating bank.
The NFS makes several ATM services interoperable, including:
cash withdrawal;
balance enquiry;
mini statements;
permitted Personal Identification Number-related services; and
other approved financial and non-financial transactions.
The Institute for Development and Research in Banking Technology originally established the NFS. NPCI took over its operation in 2009, after which it developed into the country’s principal shared ATM network.
Option (a) is incorrect. The Indian Banks’ Association is a representative organisation of banks; it does not operate the technological switch connecting ATMs.
Option (b) is incorrect. The National Securities Depository Limited primarily holds securities in dematerialised form and facilitates their transfer. It does not connect the ATM network.
Option (d) is incorrect. The RBI authorises, regulates and supervises payment systems, but the NFS network interconnecting ATMs is operated by NPCI.