The Reserve Bank of India (RBI) has extended the timeline or making the application authorisation a pan-India umbrella entity for retail payments up to March 31, 2021. Earlier, the central bank had provided a timeline of six months which was scheduled to end on February 26, 2021.
While extending the timeline, RBI said that requests have been received from various stakeholders including Indian Banks’ Association for extending the timeline, keeping in view the COVID-19 related disruptions and inconveniences. It has been accordingly decided to extend the timeline for making the application up to March 31, 2021.
The objective of the umbrella entity is to set-up, manage and operate new payment system(s) in the retail space comprising of but not limited to ATMs, White Label PoS; Aadhaar based payments and remittance services; newer payment methods, standards and technologies; monitor related issues in the country and internationally; take care of developmental objectives like enhancement of awareness about the payment systems.
All entities eligible to apply as promoter/promoter group of the umbrella entity shall be owned and controlled by resident Indian citizens with 3 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 umbrella entity shall be deemed to be a Promoter.
As per the RBI's guidelines, the umbrella entity has a minimum paid-up capital requirement of Rs500 crore. No single Promoter/Promoter Group shall have more than 40% investment in the capital of the umbrella entity. The Promoters / Promoter Groups shall upfront demonstrate the capital contribution of not less than 10% i.e., Rs50cr at the time of making an application for setting up the umbrella entity. The balance capital shall be secured at the time of commencement of business/operations. The Promoter / Promoter Group shareholding can be diluted to a minimum of 25% after 5 years of the commencement of business of the umbrella entity. A minimum net-worth of Rs300cr shall be maintained at all times.
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