Supervision of New Umbrella Entities
- Posted By
10Pointer
- Categories
Economy
- Published
13th Apr, 2021
-
Context
The Reserve Bank of India (RBI) is looking for outsourcing direct and supervisory control over the New Umbrella Entities (NUE). It is suggesting for National Payments Corporation of India (NPCI) or any other independent entity for its supervision.
About New Umbrella Entities (NUEs)
- New Umbrella Entities will be non-profit entities.
- It shall be a Company incorporated in India under the Companies Act, 2013.
- The umbrella entity shall be a Company authorized by the Reserve Bank of India (RBI) under Section 4 of the PSS Act, 2007.
- As per the RBI rules, no single promoter can have over 40 percent stake in the NUE. Further, the percent of stake has to be reduced to less than 25 percent within five years of operation.
- Foreign investment is allowed in NUEs as long as they comply with the existing guidelines.
- Entities which are owned and controlled by Indian citizens with at least three years of experience in the payments sector can become promoters of NUEs.
Key-functions
- It will be a pan-India umbrella entity that would focus on retail payment systems.
- It will help in setting up and management of a new payment system.
- It will work especially for retail such as ATMs, white-label PoS, Aadhaar-based payments, and remittance services.
- NUEs will develop new payment methods, standards, and technologies for the operation and clearance of settlement systems.
The previous structure
- Earlier, NPCI was working as the umbrella entity for providing retail payments system.
- But due to its task burden, it was decided to set up new umbrella entities for retail payment.
NPCI
- NPCI is an umbrella organization for retail payments and settlement systems in India.
- It is an initiative of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007.
- It has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013).
Some initiatives of NPCI
- RuPay: RuPay is an Indigenously developed Payment System.
- IMPS: With the help of Immediate Payment Service (IMPS), India has become one of the leading countries in the world in real-time payments in the retail sector.
- NACH: National Automated Clearing House (NACH) is an offline web-based system for bulk push and pull transactions.
- ABPS: Aadhaar Payment Bridge (APB) System is helping the Government and Government agencies in making the Direct Benefit Transfers in various Central as well as State sponsored schemes.
- AePS: To access the funds at the door step & drive financial inclusion in India, the Aadhaar enabled NFS: National Financial Switch (NFS) is the largest network of shared Automated Teller Machines (ATMs) in India that facilitates interoperable cash withdrawal, card to card funds transfer, and interoperable cash deposit transactions among other value-added services in the country.
- UPI: Unified Payments Interface (UPI) has been termed as the revolutionary product in thepayment system.
- Bharat Bill Payment System: Bharat Bill Payment System is offering a one-stop bill payment solution.
- NETC: National Payments Corporation of India (NPCI) has developed the National Electronic Toll Collection (NETC) program for meeting the electronic tolling requirements of the Indian market.
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