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Difficulty: MediumInference and Logical Deduction

Read the following passage carefully:

Under the 2026 Rural Financial Inclusion and Digital Banking Mandate, regional rural banks (RRBs) operating in notified semi-urban and rural districts are required to deploy biometric-enabled micro-ATMs across all assigned village panchayats. The mandate specifies that any RRB achieving 100% biometric terminal deployment within 12 months becomes eligible for a 15% operational subsidy from the National Rural Development Fund. However, the policy stipulates that receipt of this subsidy is strictly contingent upon the RRB maintaining an annual transaction uptime of no less than 98% across its entire terminal network. Furthermore, while scheduled commercial banks (SCBs) are permitted to partner with third-party business correspondents to fulfill rural service quotas, RRBs are explicitly prohibited from outsourcing core biometric authentication operations to non-banking intermediaries. Consequently, an RRB that fails to achieve the 98% network uptime threshold, regardless of its terminal deployment percentage, forfeits its eligibility for the operational subsidy for that financial year.

Statement: A Regional Rural Bank that successfully deploys biometric micro-ATMs across 100% of its assigned village panchayats within 12 months by contracting core biometric authentication operations to a third-party technology vendor is eligible for the 15% operational subsidy provided its network uptime is 99%.

Answer: Answer

Answer

False
The statement is False because the passage explicitly states that RRBs are prohibited from outsourcing core biometric authentication operations to non-banking intermediaries. Even though the RRB in the scenario satisfied the 100% deployment and 99% uptime requirements, its reliance on a third-party technology vendor for core biometric processing constitutes a direct violation of the policy, negating its subsidy eligibility.

Step-by-Step Solution

1
Identify the conditions required for an RRB to qualify for the 15% operational subsidy under the 2026 Mandate.
The passage outlines two quantitative thresholds: 100% biometric terminal deployment within 12 months and maintaining at least 98% annual network uptime.
Establishing the primary baseline criteria for subsidy qualification.
2
Identify operational restrictions imposed on RRBs.
The passage explicitly prohibits RRBs from outsourcing core biometric authentication operations to non-banking intermediaries, distinguishing them from SCBs.
Determining whether external operational arrangements are permissible under the policy.
3
Evaluate the statement's scenario against both the quantitative and operational constraints.
Although the bank met the 100% deployment and 99% uptime thresholds, it outsourced core biometric authentication to a third-party technology vendor (a non-banking intermediary).
Violating the explicit operational prohibition means the bank fails to comply with the mandate's terms, making the claim of subsidy eligibility false.

Key Concept

Logical Deduction from Prohibition Clauses and Conditional Eligibility Rules
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Topics

Inference and Logical Deduction

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