Nowadays, the average Indian can pay their bills online without having to stand in line, and QR codes are used instead of cash for everyday purchases at local stores. All of this is made possible by a single organization called the National Payments Corporation of India; however, the government wants to make it better. Six consortiums, including Facebook, Google, Amazon, Flipkart, and others, submitted bids to develop a NPCI replacement.
However, all of their applications for the creation of a New Umbrella Entity (NUE) have been turned down by the Reserve Bank of India. According to the central bank, none of them have proposed anything that could be considered a technological breakthrough. They have pitched NUEs that have not met RBI's expectations and are very similar to NPCI.
Clearing and settlements are managed by the RBI-established NPCI, for which it is currently looking for a more innovative replacement. The RBI's expectations were met by major players like SoHum Bharat, Jio, Tata, Airtel Digital, Kotak Bank, Mastercard, ICICI Bank, HDFC Bank, Axis Bank, Ola Financial, and Policy Bazaar. All of the consortiums are competing for the NUE license, which will allow them to start businesses that provide value-added insurance and lending.
The NUE will bring in private businesses to introduce competition and reduce risks because the NPCI is a non-profit that is burdened by the volume of transactions that must be processed. It must have a paid-up capital of Rs. 500 crore from each bidder, and one promoter's stake cannot exceed 40%.
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