The Reserve Bank of India (RBI) has set up a five-member committee to evaluate relationships and give advice on new umbrella entity (NUE) licences.
The five-member committee will be headed by RBI chief general manager P Vasudevan. The New Umbrella Entities will set up their own payment foundation to compete with the National Payments Corp. of India (NPCI).
Significance
The centre proposes to make a settlement system related to the unified payments interface (UPI) with the new umbrella entity (NUE) licences. The scheme will largely concentrate on small and medium businesses, merchants and consumers.
Key Details
•The five-member committee will be accountable for examining various features of New Umbrella Entities.
It will be accountable for various features, rising from the macroeconomic influence of the NUEs to security risks.
•The committee will give advice that will be brought to attention before transferring out the licences.
What are New Umbrella Entities?
New umbrella entities are for-profit entities that will be set up to handle payments in the local space. These private entities can offer a variety of retail payment services, including ATMs, point of sale computers, Aadhaar-based payments, payment services and promote more different payment methods.
Why has RBI allowed the creation of New Umbrella Entities?
The Reserve Bank of India during in August 2020 published guidelines, encouraging companies to build New Umbrella Entities to end the monopoly of the National Payments Council of India (NPCI), which serves as a non-profit.
