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.