RBI Proposes to Set up Alternative Retail Payments Organisation
Image Source: Shuttershock

The Reserve Bank of India (RBI) has reportedly proposed to establish an alternative digital retail payments system to prevent the National Payments Corporation of India Limited (NPCI) from dominating the current system.

According to the RBI, the new payments system is aimed at managing the retail space and will operate clearing and settlement systems. In the same line, the new alternative retail payments systems will be able to recognise the risks involved in credit, settlement and liquidity and manage them appropriately.

RBI has reportedly released a set of draft norms on the new system. Earlier, the Central Bank had established the NPCI in a move to develop and manage different online payment systems in the retail space.

Also Read: RBI Issues New Guidelines for Debit and Credit Card Companies

However, the NPCI began to pick up pace in such a manner that the payments system dominated the retail space, creating a monopoly. With the NPCI becoming too big a system to fail, the RBI decided to establish an alternative digital payments system to manage and operate retail payments.

According to the draft guidelines released by the RBI, the new system can be utilised by both for-profit and not-for-profit entities.

Also, the new entity shall include a board committee to ensure transparency and see to that the corporate governance principles are met accordingly. However, the right to nominate and appoint the board of directors on such new umbrella entities will be retained by RBI.

For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in

You May Also Like
Aadhaar Update

UIDAI Introduces a New Service—“Order Aadhaar Card”

UIDAI has launched “Order Aadhaar Card” service. With the help of this…

Cryptocurrency and Income Tax in India

Regulations on cryptocurrencies are different in different countries across the globe. Even…

Role of Technology in the Era of COVID-19 Pandemic

Technology will not be able to avoid the onset of a pandemic;…

Everything You Need to Know About Aarogya Setu e-Pass

The Aarogya Setu e-Pass has been launched for emergency purposes and to…