In 2020, the Reserve Bank of India (“RBI”) released the framework for pan India New Umbrella Entity (“NUE”) for retail payment systems. The frame work can be accessed here. The system was designed to compete with National Payment Corporation of India (“NPCI”) . Companies like facebook, google, amazon, flipcart and Tata group had formed consortium with other companies and applied for NUE license in 2021 but received no response from RBI.
Recently, RBI has put issuance of license for NUE network, on hold. The applicants were denied license as its proposal has fallen short of RBI expectation. None of the applicant has proposed any novel technology that is not already present with NPCI.
The NUE was supposed to be set up as a separate entity that could reduce risks of overload on the UPI infrastructure and work as an alternative to the NPCI, promoted by banks but it seems like RBI’s wait for an appropriate plan is not over yet.