Reliance Industries Limited (RIL) has partnered with Google and Facebook to set up the New Umbrella Entity (NUE). This will enable the company to create a payment network like Unified Payments Interface (UPI) and gain share in India’s digital payment market. The NUE will face the National Payment Corporation of India (NPCI) directly. This NUE will be jointly promoted by So We India, a subsidiary of Reliance and Infibeam Avenues Limited. Facebook and Google will be less in this.
Reliance to build digital payment system with Facebook and Google, will compete with UPI
Now the big question comes here, why despite the NPCI, the Reserve Bank of India (RBI) is in need of a new NUE. Im this article we will tell you about this new umbrella entity in detail.
New umbrella entity’s application date extended
The Reserve Bank of India has extended the last date for filling the application for the New Umbrella Entity (NUE) to 31 March 2021, whereas earlier the last date for filling the application was 26 February 2021. In this context, RBI stated that requests have been received from various stakeholders including Indian Banks’ Association to extend the period keeping in view the disruptions and inconveniences related to Kovid-19. Therefore, it has been decided to extend the application period to 31 March 2021.
What does the RBI want from the New Umbrella Entity ?
The Reserve Bank’s interest in the New Umbrella entity is straightforward. Through the New Umbrella Entity, RBI wants cash transactions to end and new players (companies) are included in the digital payment system. Digital payment is completely transparent and tax evasion can also be monitored when all the payments will be made through it. The government’s direct objective regarding the New Umbrella Entity is to make the entire country cashless.
What is the situation now ?
Talking about the current situation, all the online payments are being made in the country through NPCI. The NPCI controls the Unified Payment Interface i.e. UPI. Right now, digital payments are being made through many platforms in the country and all have the support of UPI. Now the government and RBI are thinking that NPCI alone will not be able to control the increasing number of digital payments in the coming times. Therefore, there is talk of establishing a new umbrella entity. NUE will take on NPCI. Just like NPCI is controlling UPI, IMPS and other payments, the New Umbrella entity will also be preparing its own payment system.
NUE will have six parts
- The RBI guidelines regarding the New Umbrella entity are very clear. The New Umbrella entity is divided into six parts. In the first part, retail stores, ATMs, POS and Aadhaar based payments will have to be managed. In the first part, the difficulties faced during the payment have also been kept.
- In the second part, there will be all kinds of settlement related to payment, which will include both bank and non-bank. In the second part, the management of any type of fraud etc. will be done.
- The third part will be work on fairness, equity and competitiveness. In this part, necessary rules etc. will be prepared and implemented. This part will also work on whether the payment system is safe and worthy of payment.
- In the fourth part, there will be work related to business related payments. Simply put, retail payment is kept in this part. Customer safety will also be taken care of in this.
- In the fifth part, there will be talks about the payment system operated by NPCI and advice will be taken in case of any problem.
- In the sixth part there will be work related to bank account. Deciding whether to continue or close a bank account, this part will be useful.
These consortiums of companies are in the race for New Umbrella entity
- Reliance Industries, Infibeam Avenues, Google and Facebook
- Tata Group, HDFC Bank, Kotak Mahindra Bank, MastCard, Bharti, PayU
- Amazon, ICICI Bank, Axis Bank, Pine Labs, Billdesk and Visa Card
- Paytm, IndusInd Bank, Ola Financial, Centrum Finance, JetPay and EPS