RBI extends deadline to apply for umbrella entity on retail payments

By: |
February 26, 2021 5:41 PM

In August last year, RBI had released a framework for authorisation of an umbrella entity for retail payments in the country and had invited applications from desirous entities by February 26, 2021.

rbiReserve Bank of India (RBI) has kept the key repo rate unchanged at 4 per cent to support growth in the current situation.

The RBI on Friday extended the deadline to apply for an umbrella entity, which the central bank wants to set up to focus on retail payments system in the country, by over a month to March 31 in view of the pandemic.

In August last year, RBI had released a framework for authorisation of an umbrella entity for retail payments in the country and had invited applications from desirous entities by February 26, 2021.

Requests have been received from various stakeholders including Indian Banks’ Association for extending the deadline, keeping in view the COVID-19 related disruptions and inconveniences, RBI said in a release.

It has been accordingly decided to extend the timeline for making the application up to March 31, 2021, it said.

The entity is to be set up as a company as a for-profit under the Companies Act, 2013 and will get authorisation under the Payment and Settlement Systems Act, 2007 (PSS Act).

Such entities will undertake tasks such as setting up, managing and operating new payment systems in retail space.

These activities include 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; taking care of developmental objectives like enhancement of awareness about the payment systems.

They are also expected to operate clearing and settlement systems for participating banks and non-banks, carry on any other business suitable to further strengthen the retail payments ecosystem in the country.

Such entities are also expected to interact and be interoperable, to the extent possible, with the systems operated by National Payments Corporation of India (NPCI).

The umbrella entity may be permitted to participate in Reserve Bank’s payment and settlement systems, including having a current account with RBI, if required, the regulator had said in August last year.

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