Reserve Bank of India (RBI Not in Favour of Supervising New Umbrella Entities (NUE)

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As reported, RBI is not in favor of having direct and supervisory control over NUE due to the high cost of setting up a new division,

RBI wants agencies such as the National Payments Corporation of India (NPCI) or a newly formed body to take over the role.

  • NPC is an umbrella organization for operating retail payments and settlement systems in India.
  • It is an initiative of RBI and the Indian Banks’ Association under the Payment and Settlement Systems Act, 2007.

• In August 2020, RBI had issued a framework for the authorization of an umbrella entity for retail payments to counter monopoly and concentration risk.

  • Currently, NPC is the only umbrella organization for operating retail payments and settlement systems.
  • NPC, which controls over 60% of retail payments, has become ‘too big to fail.
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