Umbrella organisations in India for payment systems

National Payments Corporation of India (NPCI)

RBI, in its Vision for Payment Systems 2005-08, envisioned the need for an umbrella organisation for all the retail payment systems in the country, with the objective of optimally using the resources through consolidation of existing infrastructure and building new infrastructure to enable national reach in a seamless manner. It envisaged constituting an umbrella organisation to have a robust technology platform and provide service of high quality to customers at an affordable price structure.

Thus, NPCI was set up, with guidance and support of RBI and the Indian Banks' Association (IBA), as an umbrella organisation for retail payments system in India. It was incorporated in December 2008 as a Section 25 company (not-for-profit company) under Companies Act, 1956 (now Section 8 of Companies Act, 2013) with the aim to operate for the benefit of all member banks and their customers, create infrastructure for operating pan-India systems with high availability and scalability to process increasing volumes of retail electronic payments, etc. India is one of the few jurisdictions to have attempted this and over the period of 10 years, the share of transactions handled by NPCI is a testimony to the success and criticality of this initiative, probably the first of its kind across the globe!

NPCI started with 10 core promoter banks (State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank N. A. and HSBC) as shareholders. In the year 2016, the shareholding of NPCI was broad-based to include more banks representing all sectors. As on date, the number of shareholders of NPCI is 67, comprising 11 public sector banks, 18 private sector banks, 5 foreign banks, 10 cooperative banks, 7 Regional Rural Banks (RRBs), 4 Small Finance Banks (SFBs), 2 Payment Banks (PBs) and 10 PSOs.

In December 2013, NPCI was entrusted with the task of operating CTS on behalf of RBI. It also took over from IDRBT in December 2009, the task of managing NFS which operated an ATM network having 37 members with 50,000 ATMs. It has grown to a network of 112-member banks connecting over 2.3 lakh ATMs as at end-December 2020. These two activities are the main revenue source for NPCI on the strength of which it has been able to expand its operations and invest in innovative ideas and systems.

The retail payments space has further developed and matured with a variety of systems introduced and operated by NPCI. With the aim of touching lives of every Indian, NPCI has rolled out a variety of innovative retail payment products viz., IMPS, RuPay card scheme, UPI, NACH, Aadhaar-enabled Payments System (AePS), Aadhaar Payments Bridge System (APBS), NETC, *99# (USSD based) and BBPS. Further, NPCI's alliance with international network partners (Discover Financial Services, Japan Credit Bureau and China Union Pay) has paved the way for international acceptance of RuPay.

Widespread adoption of NPCI's retail payment products has made NPCI truly an umbrella organisation for retail payment systems. NPCI's retail payment products have also provided an impetus to RBI's vision of a 'less-cash' society and of empowering every Indian with access to a bouquet of e-payment options that is safe, secure, convenient, quick and affordable. NPCI has been yet another successful experiment and experience in the Indian payment systems space.

NPCI International Payments Limited

Over the years, the retail payment systems of NPCI have gained widespread acceptance across the country and generated enormous interest from other jurisdictions as well. In order to bestow undivided attention to the global outreach of NPCI payment systems, a subsidiary, viz., NPCI International Payments Limited (NIPL), was established in April 2020. NIPL is tasked with the responsibility of exporting, in consultation and co-ordination with RBI, NPCI's indigenously developed offerings to foreign markets. To begin with, the primary focus of NIPL is the internationalisation of RuPay and UPI.

Source : RBI