RBI opens application window for private companies to set up NPCI-like umbrella entity

RBI opens application window for private companies to set up NPCI-like umbrella entity:

RBI also said that applications have to come latest by 26 February 2021 and the umbrella entity will have to start operations within six months, extendable to a maximum of one year, if required, from the date of in-principle approval.

The new entity will need to operate new payment systems which will include ATMs, white label PoS, Aadhaar based payments and remittance services, newer payment methods. standards and technologies. It will further be tasked with operating clearing and settlement systems for participating banks and non-banks, monitoring retail payment system developments and related issues in the country and internationally to avoid shocks.

“It is expected that the umbrella entity shall offer innovative payment systems to include hitherto excluded cross-sections of the society and which enhance access, customer convenience and safety and the same shall be distinct yet interoperable”, the RBI said.

NPCI, a ‘not-for-profit’ entity registered under section 8 of Companies Act, is owned by a consortium of leading public and private sector banks. It is directly responsible for functioning of highly important digital payment channels such as Unified Payment Interface (UPI), NACH, National Financial Switch (NFS) and IMPS.

Earlier reported in April that several high-profile corporates in India Inc including Reliance, Paytm, National Stock Exchange and Bombay Stock Exchange had expressed interest in participating in the project once RBI opened the window for application. Companies have been now given time till February of 2021 to apply.

Several high-profile foreign fintech companies and payment networks are also known to be interested in submitting applications and setting up the entity, as per people in the know. Some of these companies have even set up internal advisory committees to strengthen applications.