RBI to set up five-member panel on new umbrella entity licenses

New umbrella entities are for-profit entities that will be set up to manage payments in the retail space. 

Created On: Sep 2, 2021 14:02 IST
Reserve Bank of India
Reserve Bank of India

The Reserve Bank of India (RBI) has set up a five-member committee to review applications and give recommendations on new umbrella entity (NUE) licences. 

The five-member committee will be chaired by RBI chief general manager P Vasudevan. The New Umbrella Entities will set up their own payment infrastructure to compete with the National Payments Corp. of India (NPCI). 

Significance

The centre aims to build a settlement system similar to the unified payments interface (UPI) with the new umbrella entity (NUE) licences. The system will mainly focus on small and medium enterprises, merchants and consumers. 

Key Details 

•The five-member committee will be responsible for looking into several aspects of New Umbrella Entities.

•It will be responsible for various aspects, starting from the macroeconomic impact of the NUEs to security risks.

•The committee will give recommendations that will be taken into consideration before giving out the licences.

What are New Umbrella Entities?

New umbrella entities are for-profit entities that will be set up to manage payments in the retail space. These private entities can offer a range of retail payment services, including setting up of ATMs, point of sale terminals, Aadhaar-based payments, remittance services and develop newer payment methods.

Why has RBI allowed creation of New Umbrella Entities?

The Reserve Bank of India had in August 2020 issued guidelines, inviting companies to create New Umbrella Entities to end the monopoly of National Payments Council of India (NPCI), which acts as a non-profit.

Why are bank unions opposing NEUs?

The State Bank of India union along with a global alliance had in June 2021 asked the RBI to bar large companies from setting up payment networks, stating that privatisation could compromise data safety.

The bank unions urged the central bank to scrap the "whole process of NUE licensing" and focus on strengthening the domestic payments group, NPCI.

Take Weekly Tests on app for exam prep and compete with others. Download Current Affairs and GK app

एग्जाम की तैयारी के लिए ऐप पर वीकली टेस्ट लें और दूसरों के साथ प्रतिस्पर्धा करें। डाउनलोड करें करेंट अफेयर्स ऐप

AndroidIOS

Related Stories

Comment (0)

Post Comment

5 + 0 =
Post
Disclaimer: Comments will be moderated by Jagranjosh editorial team. Comments that are abusive, personal, incendiary or irrelevant will not be published. Please use a genuine email ID and provide your name, to avoid rejection.

    Monthly Current Affairs PDF

    • Current Affairs PDF November 2021
    • Current Affairs PDF October 2021
    • Current Affairs PDF September 2021
    • Current Affairs PDF August 2021
    • Current Affairs PDF July 2021
    • Current Affairs PDF June 2021
    View all

    Monthly Current Affairs Quiz PDF

    • Current Affairs Quiz PDF November 2021
    • Current Affairs Quiz PDF October 2021
    • Current Affairs Quiz PDF September 2021
    • Current Affairs Quiz PDF August 2021
    • Current Affairs Quiz PDF July 2021
    • Current Affairs Quiz PDF June 2021
    View all