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Thursday, September 24, 2020

RBI unveils framework for umbrella entity to manage payment systems

According to the RBI, no single promoter or promoter group should have more than 40 per cent investment in the capital of the umbrella entity.

By: ENS Economic Bureau | Mumbai | August 19, 2020 4:00:30 am
rbi, Reserve Bank of India, rbi corporate loans, rbi bank moratorium, rbi news The RBI will notify the parameters, along with modifications, before September 7.

The Reserve Bank of India (RBI) on Tuesday unveiled the framework to set up a pan-India umbrella entity with a minimum capital of Rs 500 crore, which will set up, manage and operate new payment systems in the retail payment space.

According to the RBI, no single promoter or promoter group should have more than 40 per cent investment in the capital of the umbrella entity. “The promoter shareholding can be diluted to a minimum of 25 per cent after 5 years of the commencement of business of the umbrella entity. A minimum net-worth of Rs 300 crore should be maintained at all times,” it said.

The proposed entity may be a ‘for-profit’ or a Section 8 company as may be decided by it, the RBI said. It will set up and operate new payment systems in the retail space comprising of 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 and take care of developmental objectives like enhancement of awareness about the payment systems.

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