SBI to launch rival to NPCI, may onboard other public & private sector banks

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SBI planning to launch rival to NPCI, may onboard other public and private sector banks:

SBI is a shareholder in the NPCI, which is owned by a consortium of public and private sector banks.

Currently, SBI is a stakeholder in the NPCI, which is a ‘not-for-profit’ entity registered under Section 8 of the Companies Act. However, the SBI-run company entity would likely be a ‘for-profit’ entity.

State Bank of India (SBI)—India’s largest lender by assets—is reportedly considering to challenge the monopoly of the National Payments Corporation of India (NPCI) as the state-controlled lender is all set to create a rival digital payments ecosystem. Plus, the state-run lender is all set to enter the country’s fast-growing digital payments industry as a primary stakeholder.

The NPCI, which controls over 60% of payment volumes and provides services such as Unified Payments Interface (UPI), Immediate Payment Services (IMPS) and Bharat Interface for Money (BHIM), is an umbrella organisation for operating retail payments and settlement systems in the country. It is worth noting that the Reserve Bank of India (RBI) earlier this month had set a net worth criteria of Rs 500 crore for any new umbrella organisation governing retail payments that will compete against the NPCI.

SBI’s top management has held initial rounds of talks and is “examining” the option for applying for a licence under the banking regulator’s New Umbrella Entity (NUE) framework for retail payments, an SBI official with knowledge of the matter told ET.

According to the central bank’s framework for NUE, entities getting the green signal can establish a payments company for owning and managing digital payments network across India, exercising the same powers that the NPCI does at present.

An SBI spokesperson told the business daily that the bank is “examining the framework” as the lender could leverage its scale and existing capabilities to reach a wider base. “The framework is also being examined by SBI, as the presence of an additional entity may lead to further deepening of the digital retail payments ecosystem,” the spokesperson added.

The financial daily cited an unnamed person familiar with the development as saying that though the negotiations are at an early stage, one of the methods the new digital payments entity could be formed is through a joint ownership-based model where SBI, as a promoter, could attract other state-run lenders to form a group.

He went on to add that another option could be SBI partnering with financial technology (fintech) startups which could aid help the bank give some of its digital initiatives through its banking channel.

Currently, SBI is a stakeholder in the NPCI, which is a ‘not-for-profit’ entity registered under Section 8 of the Companies Act. However, the SBI-run company entity would likely be a ‘for-profit’ entity.

Meanwhile, it has been reported that billionaire Mukesh Ambani-controlled conglomerate Reliance Industries (RIL), payment behemoth Paytm, capital market exchanges NSE and BSE were among top companies that were interested in obtaining licenses to own and run an entity with powers at par with the NPCI.

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RBI opens application window for private companies to set up NPCI-like umbrella entity: https://www.desidime.com/discussions/rbi-opens-...

JIO, Paytm interested to launch its own Credit Card & UPI company (competitor of Visa, Mastercard, RuPay, UPI etc): https://www.desidime.com/discussions/jio-paytm-...

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abhishek012 wrote:

RBI opens application window for private companies to set up NPCI-like umbrella entity: https://www.desidime.com/discussions/rbi-opens-...

JIO, Paytm interested to launch its own Credit Card & UPI company (competitor of Visa, Mastercard, RuPay, UPI etc): https://www.desidime.com/discussions/jio-paytm-...

loot hei loot milegi..with more entrants..

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abhishek012 wrote:

RBI opens application window for private companies to set up NPCI-like umbrella entity: https://www.desidime.com/discussions/rbi-opens-...

JIO, Paytm interested to launch its own Credit Card & UPI company (competitor of Visa, Mastercard, RuPay, UPI etc): https://www.desidime.com/discussions/jio-paytm-...

Pehle payment gateway then Credit Card then payment facilator.

Nice

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AyushiiiVijay wrote:

loot hei loot milegi..with more entrants..

Yes. Just like initial jio recharge offers

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Visa and Mastercard are firming up plans to increase competition against NPCI - https://economictimes.indiatimes.com/industry/b...

The companies – among the most valued financial entities on the planet – are pursuing partnership opportunities with prospective applicants of the central bank’s New Umbrella Entity (NUE) license, as per two sources aware of the talks.

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