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With reference to the Prepaid Payment Instruments, consider the following statements:
  1. These are payment instruments that facilitate the purchase of only specific goods and services.
  2. The open system payment Instruments are issued only by the banks.
Which of the statements given above is/are correct?
  • a)
    1 Only
  • b)
    2 Only
  • c)
    Both 1 and 2
  • d)
    Neither 1 nor 2
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
With reference to the Prepaid Payment Instruments, consider the follow...
Recently, the Reserve Bank of India (RBI) permitted all inbound travellers from the Group of Twenty (G-20) countries and non-resident Indians to access Unified Payment Interface (UPI) for their merchant payments (P2M) at select airports.
  • Prepaid Payment Instruments are instruments that facilitate the purchase of goods and services, including financial services, remittance facilities, etc., against the value stored on such instruments.
  • Open System PPIs: These PPIs are issued only by banks (approved by RBI) and are used at any merchant for the purchase of goods and services. Cash withdrawal at ATMs / Point of Sale (PoS) terminals / Business Correspondents (BCs) is also allowed through such PPIs.
Hence only statement 2 is correct.
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Community Answer
With reference to the Prepaid Payment Instruments, consider the follow...
Explanation:

Statement 1: These are payment instruments that facilitate the purchase of only specific goods and services.
- This statement is incorrect. Prepaid Payment Instruments (PPIs) are not limited to specific goods and services. They can be used for a wide range of transactions, including payment for goods and services, funds transfer, and withdrawal of cash.

Statement 2: The open system payment Instruments are issued only by the banks.
- This statement is correct. Open system PPIs are issued by banks and non-bank entities authorized by the Reserve Bank of India. These instruments can be used for purchase of goods and services, funds transfer, and cash withdrawal.
Therefore, the correct answer is 2 Only as per the provided statements.
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