In August 2020, the Reserve Bank of India (RBI) had released a framework for authorisation of a New Umbrella Entity (NUE) for retail payments in the country and had invited applications from desirous entities.
- The RBI has set a deadline of March 31 for firms to submit their applications for setting up NUEs.
- An an NUE shall be a Company incorporated in India under the Companies Act, 2013 and may be a ‘for-profit’ or a Section 8 Company as may be decided by it.
- The umbrella entity shall be a Company authorised by Reserve Bank of India (RBI) under Section 4 of the PSS Act, 2007. It shall be governed by the provisions of the PSS Act and other relevant statutes and directives, prudential regulations and other guidelines / instructions.
- All entities eligible to apply as promoter / promoter group of the umbrella entity shall be owned and controlled by resident Indian citizens with 3 years’ experience in the payments ecosystem as Payment System Operator (PSO) / Payment Service Provider (PSP) / Technology Service Provider (TSP).
- Any entity holding more than 25% of the paid-up capital of the umbrella entity shall be deemed to be a Promoter.
- Currently, the National Payments Corporation of India (NPCI) is the single umbrella body to facilitate retail payments in India.
- NPCI owns and operates the UPI Interface, the RuPay network and other payment and settlement functions.
- But, the government and the RBI feel that the NPCI alone won’t be able to carry out the big shift to digital considering the volume of transactions and the number of new entrants.
- According to the Moneycontrol, after the 2016 demonetisation exercise, there has been a major shift in the way digital payments were perceived in India. Between 2015-16 and 2019-20, digital payments have grown at a compounded annual growth rate of 55.1 per cent – from 593.61 crore in the year to March 2016 to 3,434.56 crore in the year to March 2020.
(Source: Moneycontrol, RBI, Indian Express)
