An entity to be established in India that focuses on retail payment systems will be created-says Reserve Bank of India(RBI). This entity would scrutinize applications and give suggestions on New Umbrella Entity licenses.
A closer look at what NUE is-New umbrella entities are for-profit entities that will be set up to manage payments in the retail space. These private entities can provide a variety of retail payment services, such as ATM installation, point-of-sale terminal installation, Aadhaar-based payments, remittance services, and the development of new payment methods.
Following Section 4 of the Payment and Settlement Systems (PSS) Act, 2007, New Umbrella Entity (NUE) shall be a company authorized by the (RBI).
After the Reserve Bank of India (RBI) invited expressions of interest last year, at least six consortiums, including those led by Amazon, Google, Facebook, and the Tata group, applied for the so-called new umbrella entities (NUEs) licenses in collaboration with companies such as Reliance Industries Ltd and ICICI Bank Ltd.
NUE committee would comprise 5 members headed by RBI chief general manager P Vasudevan.
The payment structure of NUE’s would be different than that of the National Payments Corp of India (NCPI), which is a non-profit entity owned by banks. The government expects to imitate the structure of the Unified Payments Interface(UPI) settlement system to build with the NUE’s.
Small and medium enterprises, merchants, and consumers are the focal point of the NUE system.
The committee would be responsible for several aspects of NUE and their recommendation will be welcomed. It will be in charge of a variety of things, from the NUEs' macroeconomic impact to security risks and the committee will make recommendations that will be considered before the licenses are issued.