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      Question

      What does 'API' stand for and what is its

      function?
      A Application Protocol Interface β€” manages database transactions Correct Answer Incorrect Answer
      B Application Programming Interface β€” defines how software components communicate Correct Answer Incorrect Answer
      C Automated Process Integration β€” automates manual tasks Correct Answer Incorrect Answer
      D Advanced Protocol Interpreter β€” converts network protocols Correct Answer Incorrect Answer
      E Application Processing Index β€” measures software performance Correct Answer Incorrect Answer

      Solution

      An API is a set of defined rules and protocols that allows different software applications to communicate. REST APIs use HTTP/HTTPS and are widely used in fintech. Banks use APIs for UPI integration, NACH mandates, account aggregators, and Open Banking (Account Aggregator Framework mandated by RBI).

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