RBI releases framework for authorisation of pan-India Umbrella Entity for Retail Payments

Presently NPCI is the only Umbrella Entity for Retail Payments in India.
Now Reserve Bank of India has released the ‘framework for authorization of pan-India Umbrella Entity for Retail Payments’ in India.
This means that RBI has allowed companies/entities to apply to RBI to set-up pan-India umbrella entity / entities focussing on retail payment systems in India. After receiving approval from RBI, the entity may start functioning as an Umbrella Entity for Retail Payments in India just like NPCI.

Here are some major points about this framework:

Paid-up capital: The umbrella entity shall have a minimum paid-up capital of Rs 500 crore.
Promoters Share: 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., ₹50 crores at the time of making an application for setting up of 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 the business of the umbrella entity.
The umbrella entity shall commence business/operations within a time of 6 months, extendable to a maximum of one year, if required, from the date of ‘in-principle approval’.
A minimum net-worth of Rs 300 crore shall be maintained at all times.
The entity shall be a Company incorporated in India under the Companies Act, 2013.
The umbrella entity shall be a Company authorized by Reserve Bank of India (RBI) under Section 4 of the PSS Act, 2007.

Points to remember:

What is the minimum paid-up capital requirement for setting up an Umbrella Entity for Retail Payments in India?- Rs 500 crore
What is the maximum limit allowed on share of single Promoter / Promoter Group in the capital of the umbrella entity?- 40%
The Promoter / Promoter Group shareholding can be diluted to a minimum of _______ after 5 years of the commencement of the business of the umbrella entity.- 25%

Source: RBI

Scope of Activities for the Umbrella Entity for Retail Payments