RBI Has Issued Framework for Authorisation of Pan-India Umbrella Entity for Retail Payments

Eligibility: Any resident entity having minimum 3 years of experience in the payments ecosystem as Payment System Operator (PSO)/ Payment Service Provider (PSP) / Technology Service Provider (TSP). 

Capital: Minimum paid-up capital of Rs. 500 crores (promoter contribution = 40% which can be subsequently diluted to 25% after 5 years, minimum net worth of Rs. 300 crores to be maintained at all times. 

Foreign investment: Permissible subject to fulfillment of capital conditions and approval.

Corporate Governance: Corporate governance norms applicable (including fit and Proper criteria of promoter/ promoter group). 

Scope of activities:

  • Set-up, manage and operate new payment system(s) in the retail space comprising of but not limited to ATMs,
  • White Label Pos
  • Aadhaar based payments and remittance services; 
  •  Newer payment methods, standards and technologies; 
  • Monitor related issues in the country and internationally;
  • Operate clearing and settlement systems for participating banks and non-banks;

Other key points to be followed by the umbrella entity:

  • Take care of developmental objectives like enhancement of awareness about the payment systems
  • Identify and manage relevant risks such as settlement, credit, liquidity and operational and preserve the integrity of the system(s);
  • Monitor retail payment system developments and related issues in the country and internationally to avoid shocks, frauds and contagions that may adversely affect the system(s) and / or the economy in general.
  • Fulfil its policy objectives and ensure that principles of fairness, equity and competitive neutrality are applied in determining participation in the system; frame necessary rules and the related processes to ensure that the system is safe and sound, and that payments are exchanged efficiently
  • Carry on any other business as suitable to further strengthen the retail payments ecosystem in the country.
  • 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;
  • Entity should interact and be interoperable, to the extent possible, with the systems operated by NPCI. 

A detailed procedure for submitting the application (alongwith business plan) have been provided.