RBI issues draft framework for alternative retail payments system

Source : IANS
Author : IANS
Last Updated: Wed, Feb 12th, 2020, 11:57:35hrs
RBI issues draft framework for alternative retail payments system

New Delhi:  The Reserve Bank of India on Tuesday published the draft framework for authorisation of a new pan-India umbrella organisation for retail payment systems, apart from the National Payments Corporation of India (NPCI) which developed the widely-used UPI payment system in August 2016.

The new entity proposed by the central bank should have a minimum paid-up capital of Rs 500 crore and no single promoter or promoter group should have more than 40 per cent investment in the capital of the New Umbrella Entity (NUE).

"The promoter or promoter group shareholding shall be diluted to a minimum of 25 per cent after 5 years of the commencement of business of the NUE. A minimum net-worth of Rs 300 crore shall be maintained at all times," the RBI said on Tuesday.

The proposed umbrella body will set up, manage and operate new payments systems, especially in the retail space, comprising of but not limited to ATMs, White Label PoS, Aadhaar-based payments and remittance services. It will develop new payment methods, standards and technologies and also operate clearing and settlement systems.

The NUE will also be responsible for monitoring retail payments system developments and related issues in the country and internationally to avoid shocks, frauds and contagions that may adversely affect the system.

The entity will have to fulfill the norms of corporate governance along with 'fit and proper' criteria for persons to be appointed to its board. The RBI will have the right to approve the appointment of directors and also nominate a member to the board.