RBI releases draft framework to authorize NUE for retail payment systems

With the aim of authorizing a pan-India new umbrella entity (NUE) for the purpose of retail payment systems, the RBI has released a draft framework. Presently only NPCI performs this role.

As defined under Section 8 of the Companies Act, the NUE could choose to be a for-profit entity or a not-for-profit as defined under Section 8 of the Companies Act.

“It shall be governed by the provisions of the PSS Act and other relevant statutes and directives, prudential regulations and other guidelines/instructions,” the central bank stated in a release.
The entity eligible to apply as promoter or promoter group for the NUE shall be ‘owned and controlled by residents’ with three years’

experience in the payments ecosystem as Payment System Operator (PSO)/Payment Service Provider (PSP)/Technology Service Provider (TSP).

The shareholding pattern shall be diversified. Any entity holding more than 25% of the paid-up capital of the NUE shall be deemed to be a promoter.