Proposals From Facebook, Google, Amazon, And Others To Replace NPCI Rejected By RBI
New Delhi, 7th January 2023: A person can now pay their bills online without standing in line, while at nearby stores, regular purchases are made using QR codes rather than cash. All of this is facilitated through the National Payments Corporation of India (NPCI). However, the government seeks to upgrade this.
Six consortiums submitted bids for developing a replacement for NPCI, including Facebook, Google, Amazon, and Flipkart among others.
However, none of their petitions for the creation of a New Umbrella Entity (NUE) have been accepted by the Reserve Bank of India (RBI). According to RBI, none of them, have made any proposals that may be viewed as technological advances. The NUEs they have pitched are very similar to the NPCI.
The RBI established the NPCI to oversee clearance and settlements, and it is currently looking for a more creative substitute. The expectations of the RBI were met by SoHum Bharat, Jio, Tata, Airtel Digital, Kotak Bank, Mastercard, ICICI Bank, HDFC Bank, Axis Bank, Ola Financial, Policy Bazaar, and other significant participants. All of the consortiums are competing for the NUE license, which will let them start businesses that provide value-added loans and insurance.
Since NPCI is a nonprofit organization that is struggling to handle the volume of transactions, the NUE will bring in private companies to increase competition and lower risks. Each bidder must have a paid-up capital of Rs. 500 crores and a promoter cannot own more than 40% of the company.
