RBI Proposes Setting Up A New Retail Payment System

The Reserve Bank of India (RBI) has proposed setting up a new umbrella entity for retail payments systems. In its press release dated 10 February, the central bank said that the new entity or entities will set-up, manage and operate a new payment system in the retail space which includes ATMs, white-label PoS, Aadhaar based payments and remittance services.

The new entity will also be involved in the development and monitoring of new payment methods, standards and technologies.

This entity will have to be a company incorporated in India under the Companies Act, 2013 and maybe a 'for-profit' or a Section 8 company, as may be decided by it.

"The NUE shall have a minimum paid-up capital of Rs.500 crore (to support / address the need of capital for managing risks, invest in technological infrastructure, for business operations, etc.)," the press release inviting comments on the draft said.

It further said the promoter group shall not have more than 40 percent investment in the capital of the NUE and should demonstrate upfront capital contribution of not less than 10 percent (Rs 50 crore).

A minimum net-worth of Rs 300 crore will have to be maintained by the NUE at all times, it added.

The RBI had previously set up National Payments Corporation of India (NPCI) in 2008 that currently oversees retail payments and settlement systems in India including UPI and RuPay.