New Umbrella entity for retail payment systems

News:The Reserve Bank of India(RBI) has released a draft framework for authorisation of a pan-India New Umbrella Entity(NUE) for Retail Payment Systems.

Facts:

About New Umbrella Entity(NUE):

• The new pan-India new umbrella entity(NUE) or entities will focus on retail payment systems with a minimum paid-up capital of Rs 500 crore.
• They may be a ‘for-profit’ or a Section 8 Company incorporated in India.It will be governed by the provisions of the Payment and settlement systems(PSS) Act and other related guidelines.
• It will set up, manage and operate new payment systems especially in the retail space consisting of ATMs,white label PoS, Aadhaar-based payments and remittance services, develop payment methods among others.

Who can apply for NUE?

• Any promoter or group who has three years of experience in the payment ecosystem as an operator, service provider or technology service provider can apply for NUE.
• However,the RBI has also disallowed any single promoter or group to hold more than 40% investment in the capital of the NUE.
• Further,RBI has also allowed the promoter or promoter group shareholding to dilute the minimum of 25% after 5 years of the commencement of the business of the NUE.