PPB Module CChapter Notes4–6 Marks Expected

Technology Trends in Banking — e-RUPI, Fintech, RegTech, SupTech, Hashtag Banking, Account Aggregators & Open Banking

Principles & Practices of Banking | Module C · Chapter 50

Covers e-RUPI voucher system (QR/SMS-based, 5 entities, INR 10,000 per voucher, 16 banks), the Fintech ecosystem, RegTech (regulatory compliance technology), SupTech (supervisory technology — IDPMS, EDPMS, CRILC), Social Media Banking statistics, Hashtag Banking on Twitter, Account Aggregators (FIPs, FIUs, consent architecture), and Open Banking (APIs, risks).

By Bankopedia.co.inUpdated 2026JAIIB PPB · Module C

📌 Why This Chapter Matters in JAIIB

Expect 4–6 questions from this chapter. Key exam focus areas: e-RUPI categories — only P2P and B2C; B2B is NOT a valid category (MCQ answer: (c) B2B); e-RUPI limit — INR 10,000 per voucher; up to 10 vouchers per mobile number; 16 banks live as of Jan 2022; 5 entities — Issuer Bank, Sponsor, Beneficiary, Designated Merchant, Acquiring Bank; e-RUPI vs UPI — e-RUPI operated by RBI; UPI operated by NPCI; Fintech benefits for Banks — 7 benefits (MCQ answer: (d) All of the above for any three-option question); RegTech 3 purposes — Regulatory Monitoring, Regulatory Obligations, Compliance Management; SupTech — used by Financial Supervisory Authorities (NOT suppliers or third-party vendors); RBI SupTech examples — IDPMS, EDPMS, CRILC; API — Application Programming Interface (not Advanced Persistent Innovation); Open Banking question 5— (c) "Being open in nature, open banking facilitates opening of accounts for financial inclusion" is the INCORRECT statement (open banking is about data sharing, not account opening).

Key Facts & References — Chapter 50 at a Glance

e-RUPI:QR code or SMS string-based e-Voucher. Cashless, contactless, purpose-specific. Operated by RBI.

e-RUPI categories:P2P (Person-to-Person) and B2C (Business to Consumer). B2B is NOT a valid category.

e-RUPI limit:Up to INR 10,000 per voucher. Up to 10 vouchers per individual per programme.

e-RUPI banks:16 banks live on e-RUPI as of 31st January 2022.

e-RUPI 5 entities:(1) Issuer Bank, (2) Sponsor, (3) Beneficiary, (4) Designated Merchant, (5) Acquiring Bank

UPI operator:NPCI — National Payments Corporation of India

e-RUPI operator:Reserve Bank of India

Fintech definition:Use of technology to deliver financial solutions; technologically enabled financial innovations. Includes start-ups to big-techs.

Fintech ecosystem:5 elements: Start-ups, Technology firms, Government, Customers, Traditional financial institutions (banks)

Fintech products:P2P lending, crowdfunding, blockchain, DLT, Big Data, smart contracts, Robo advisors, E-aggregators

RegTech:Regulatory technology — technological solutions that streamline regulatory compliance. 3 purposes: Monitoring, Obligations, Compliance Management.

SupTech:Supervisory Technology — used by Financial Supervisory Authorities (NOT suppliers, NOT third-party vendors).

RBI SupTech examples:IDPMS (Import Data Processing & Monitoring System), EDPMS (Export Data Processing & Monitoring System), CRILC (Central Repository of Information of Large Credits)

Hashtag Banking:Banking services via Twitter using hashtags (#). Customer follows bank on Twitter. Fund transfer via NEFT/IMPS.

Hashtag 6 services:Banking services, Credit card services, FASTag services, Loan Services, Fixed Deposit services, Block/Unblock card

Account Aggregators:FIP = Financial Information Provider (holds data), FIU = Financial Information User (uses data). Based on explicit customer consent.

Open Banking:Uses APIs to give third-party providers open access to consumer banking data. Also called 'open bank data'.

API:Application Programming Interface — enables businesses to make data and functionality available to external third-party developers.

Introduction & e-RUPI

Free

50.1

Introduction

The collaboration between technology and finance has constantly been evolving. Growing smartphone penetration, inefficient traditional financial systems, and consumer behavioural shifts are all factors presenting fertile ground for Fintech development in both emerging and developed economies.

Regulations need to collaborate with Fintech and RegTech players. Banking innovations like Open Banking and Social Banking are gaining momentum to enhance customer experience using simple and existing technologies. Products like e-RUPI offer contactless, easy, safe and secure payments to beneficiaries in remote and rural areas — including large sections of the population without smartphones.

50.2

e-RUPI — What Is It?

Definition

e-RUPI is a QR code or an SMS string-based e-Voucher delivered to the beneficiary's mobile. It is a one-time cashless and contactless payment mechanism. Users can redeem the voucher at merchants accepting e-RUPI without using a digital payments app, card, or internet banking.

📵

No App Required

No payment app, card, or internet banking needed

🔒

Confidential

Beneficiary details kept confidential throughout

⚡

Pre-stored Amount

Required amount pre-stored in voucher — fast & reliable

📱

SMS/QR Delivery

Delivered via SMS string or QR code to mobile

e-RUPI Categories — 2 Types

P2P — Person-to-Person

Can be issued between individuals. Framework exists but circular scope covers B2C only.

B2C — Business to Consumer

Primary category. The RBI circular outlines the scope and rules only for B2C vouchers. Issued by Corporates or Government to beneficiaries.

⚠️ MCQ answer — e-RUPI categories

e-RUPI CANNOT be issued for: (c) Business to Business (B2B). Only P2P and B2C are valid categories. B2B is NOT valid.

5 Entities in an e-RUPI End-to-End Transaction

#	Entity	Role
1	Issuer Bank (Issuer)	Bank that initiates the request to create e-RUPI. Must be RBI-authorized to issue PPIs and participating as PSP in the UPI ecosystem.
2	Sponsor	Corporate, State/Union Government department, or business customer that requests the Bank to create e-RUPIs. Defines purpose and designated merchant.
3	Beneficiary	Person for whom e-RUPI is issued. May NOT be a bank account holder (works without bank account).
4	Designated Merchant	Specific voucher acceptance points where e-RUPI can be redeemed/used to purchase goods and services.
5	Acquiring Bank (Acquirer)	Bank providing facility/capability to designated merchants to accept e-RUPI (String/QR) for redemption.

Salient Features of e-RUPI

→Issued ONLY by banks authorized by RBI to issue PPIs AND participating as PSP in the UPI ecosystem

→Authorized for redemption ONLY to purchase goods and services from a DESIGNATED MERCHANT

→CANNOT be used for cash out or cashback on redemption

→Up to INR 10,000 per voucher (limit per e-RUPI)

→Up to 10 e-RUPI vouchers per programme on a single mobile number / per individual beneficiary

→Can be used WITHOUT credit/debit cards, mobile apps, or internet banking

→No charges payable by e-RUPI beneficiaries for using e-RUPI

→Distributed ONLY in digital form

→As of 31st January 2022: 16 Banks live on e-RUPI

→Even users WITHOUT a smartphone can use e-RUPI (via SMS)

e-RUPI Benefits, e-RUPI vs UPI & Fintech

Free

Benefits of e-RUPI — For All Stakeholders

For Corporates

•Enable the well-being of employees
•End-to-end digital transaction without human intervention — reduces costs
•Issuer can track the voucher redemption
•Quick, safe and contactless voucher distribution

For Merchants

•Easy and Secure — voucher authorized through a verification code
•Hassle-free and Contactless — cash handling is NOT required

For Consumers / Beneficiaries

•Contactless — need not carry a printout of the voucher
•Easy redemption — 2-step easy redemption process
•Safe and Secure — need not share personal details; privacy maintained
•Works without a payment app or even a bank account

e-RUPI vs UPI — Key Differences

Dimension	e-RUPI	UPI
Nature	One-time cashless and contactless payment mechanism (e-Voucher)	Application used for receipt or payment of money
Type	e-Voucher (QR code / SMS string)	Digital application / interface
Operator	Reserve Bank of India (RBI)	National Payments Corporation of India (NPCI)
Usage	Redeemed at service providers' / designated merchants' counters for goods and services	Receipt or payment of money — general purpose
Internet	Can be used WITHOUT internet banking / app / card	Requires smartphone and UPI-enabled payment app

50.3.1

What is Fintech?

Definition

Financial Technology (Fintech)is the use of technology to deliver financial solutions — technologically enabled financial innovations. Fintech includes 'start-ups' to 'big-techs' and established financial institutions. At its core, Fintech is used to help corporations, business owners, and consumers better manage financial operations using specialized software and algorithms.

Fintech Ecosystem — 5 Elements

1Start-ups

2Technology firms

3Government

4Customers

5Traditional financial institutions (banks)

Major Fintech Products

P2P lending platformsCrowdfundingBlockchain technologyDistributed Ledger Technology (DLT)Big DataSmart contractsRobo advisorsE-aggregators

7 Benefits of Fintech for Banks

(a) Reduced Costs

(b) Reduced time to market

(d) World-class compliance and security

(e) Greater speed and convenience

(f) Innovative products

(g) Transparency of products

⚠️ MCQ answer — Fintech benefits

Benefits of Fintech for Banks include: (a) Reduced time to market, (b) Customer Services and Revenue, (c) Reduced Costs. Answer: (d) All of the above.

RegTech & SupTech

50.3.2

RegTech — Regulatory Technology

Definition

Regulatory Technology — technological solutions that streamline and improve regulatory processes. Assists banks or financial institutions in managing regulatory compliance.

3 Broad Purposes of RegTech

(a) Regulatory Monitoring

Monitor regulatory developments in real-time; adapt to new regulations quickly

(b) Regulatory Obligations

Manage obligations arising from laws, rules, and regulations

Make the compliance process more efficient; reduce human error through automation

Technologies Used by RegTech

Cloud computingMachine learningBig Data analyticsAIBlockchain

RegTech Solution Areas (5)

→Regulatory Reporting

→Risk Management

→Identity Management and Control

→Compliance

→Transaction Monitoring

50.3.3

SupTech — Supervisory Technology

Definition

Supervisory Technology — offers technological solutions to assist financial supervisory authorities in managing regulatory compliance. Supervisory agencies use SupTech to manage risk in the financial sector and implement regulations.

Who Uses SupTech?

⚠️ MCQ answer — SupTech users

SupTech services are used by: (d) Financial supervisory authorities. NOT: (a) Suppliers of Hardware, (b) Third-Party vendors, (c) Emerging technology vendors.

RBI Examples of SupTech Implementation

IDPMS— Import Data Processing and Monitoring System

EDPMS— Export Data Processing and Monitoring System

CRILC— Central Repository of Information of Large Credits

Future of RegTech & SupTech

Big Data analyticsArtificial Intelligence (AI)Machine Learning (ML)Cloud computing

Social Media Banking & Hashtag Banking

50.4

Social Media Banking — Key Statistics

The phenomenal growth of Social Media across the globe is an unquestionable reality. Banks must maintain active social media presence. Today's consumers — especially younger generations — raise expectations of banks via social media platforms like Facebook, Twitter, WhatsApp, and others, rather than dealing with bank officials directly.

58.4%

of the world now uses social media

4.62 Bn

people use social media (as of 31.01.2022)

social media accounts per user on average

2h 27m

spent on social media per person per day

Top Social Media Platforms — Active Users (as of 31.01.2022)

Platform	Active Users
Facebook	2.91 Billion
YouTube	2.56 Billion
WhatsApp	2.0 Billion
Instagram	1.47 Billion

50.5

Hashtag Banking

What is Hashtag Banking?

A hashtag (#) is a word or phrase preceded by a hash sign, used on social media (mainly Twitter) to identify messages on a specific topic. Indian banks have started using hashtags to provide banking services — fund transfer, balance inquiry, prepaid mobile recharges, etc. — to customers via Twitter.

6 Services via Hashtag Banking

1Banking services (fund transfer, balance inquiry, statement request)

2Credit card services

3FASTag services

4Loan Services

5Fixed Deposit services

6Block / Unblock card

How Hashtag Banking Transaction Works

1Customer follows the Bank on Twitter (mutual follow required for direct/private messages)

2Customer sends a Tweet with a designated hashtag (e.g. #Transfer, #Balance)

3Bank's listening server parses the Tweet instantly

4Request passed securely to the messaging server

5Messaging server forwards to Bank's core banking system

6Request authenticated and processed

7Response or confirmation tweeted back to customer as a direct message

8Fund transfer happens via NEFT, IMPS (existing payment channels)

Key note on Hashtag Banking

Whatever social media platform is used, the ultimate transfer of funds happens through the usual payment system channels like NEFT, IMPS etc. Banks look at hashtag banking in two ways: (1) to provide basic banking services, and (2) to give information.

Account Aggregators, Open Banking & APIs

50.6

Account Aggregators (AA Framework)

Account Aggregators retrieve or collect information related to financial assets of a customer from the holders of such information and aggregate, consolidate, and present it to specified users. Major banks in India (both public and private sector) have already joined the Account Aggregator network.

FIP — Financial Information Provider

Holders of financial information about the customer. These are the entities from whom the Account Aggregator retrieves data (e.g., banks, insurers, mutual funds).

Account Aggregator (AA)

Retrieves information from FIPs based on explicit customer consent. Aggregates and presents to FIUs. CANNOT store data or use it for other purposes.

FIU — Financial Information User

Entities that use the aggregated financial information for decision-making — e.g., lenders assessing creditworthiness, wealth managers.

Key Rules of AA Framework

→Based on EXPLICIT CONSENT of the customer
→Response envisaged to occur in REAL TIME
→Data CANNOT be stored by the AA for any other purpose
→Proper consent architecture required
→Audit trails must be available
→FIPs must implement interfaces for consent artefacts

What AA Framework Enables

→Lending decision making (eliminates paper trails)

→Loan monitoring

→Wealth management

→Personal finance management

→Reduces information asymmetry for underserved segments

→Access to financial services for earlier unserved populations

50.7

Open Banking & APIs

Open Banking Definition

Banks and non-bank financial institutions use APIs to provide third-party financial service providers with open access to consumer banking, transactional, and other financial data. Also referred to as "open bank data."

API — Application Programming Interface

Enables businesses to make the specific data and functionalityof their applications available to external third-party developers, business partners, and internal departments. Services communicate and benefit from each other's data through a specified interface.

How Open Banking Works

→Banks grant access to and control over customers' personal and financial data
→Third-party financial service providers can access banking transactions and other financial data
→Uses networks (rather than centralisation) to securely share financial information
→Consumers, financial institutions, and third-parties can connect accounts and data across institutions
→Makes it easier to do business and access financial services

Risks of Open Banking

⚠Data breaches due to inadequate security
⚠Hacking of banking APIs
⚠Insider threats at financial institutions
⚠Malicious third-party apps emptying customer accounts

⚠️ MCQ answers — API and Open Banking

Q4 — API in Open Banking refers to: (a) Application Programming Interface. NOT "Advanced Persistent Innovation."
Q5 — Which statement about Open Banking is INCORRECT? (c) "Being open in nature, open banking facilitates the opening of accounts to foster financial inclusion." — This is WRONG. Open banking is about sharing existing financial data via APIs, NOT opening new accounts. The other three statements (a), (b), and (d) are correct about open banking.

Chapter 50 — MCQ Quick Reference (All 5 Answers)

e-RUPI cannot be issued for which category?

✓ (c) Business to Business (B2B)

e-RUPI has two categories: P2P and B2C. B2B is NOT a valid category.

Benefits of Fintech products for Banks include...

✓ (d) All of the above

Reduced time to market, Customer Services & Revenue, Reduced Costs — all are benefits.

SupTech services are used by...

✓ (d) Financial supervisory authorities

Not hardware suppliers, not third-party vendors, not technology vendors — it is used by financial regulators/supervisors.

API in terms of Open Banking refers to...

✓ (a) Application Programming Interface

The full form of API is Application Programming Interface — enables external access to banking data.

Which statement about Open Banking is NOT correct?

✓ (c) Being open in nature, open banking facilitates opening of accounts to foster financial inclusion

Open banking = sharing existing data via APIs, NOT opening new accounts. (a), (b), (d) are all correct statements.

← Chapter 49: Operational Aspects of Cyber Crimes|PPB Overview|JAIIB Exam Hub

Free — no credit card needed

Unlock the complete JAIIB PPB chapter notes

✓ All 32 PPB chapters — complete notes for every syllabus topic
✓ Mnemonics, amber exam traps, and case law summaries
✓ 25+ revision flashcards per chapter for last-minute prep
✓ Mock tests for key chapters — practice in real exam format

Create free account →Sign in

Discussion

No comments yet. Be the first to share your thoughts.