The Reserve Bank of India vide its notification dated 18th August 2020 has released a framework to set up a pan-India umbrella entity focussing on retail payment systems and such entity shall be a Company incorporated in India under the Companies Act, 2013 and may be a ‘for-profit’ or a Section 8 Company as may be decided by it.
All entities eligible to apply as 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).
Any entity holding more than 25 percent of the paid-up capital of the umbrella entity will be deemed to be a promoter and according to the central bank, the umbrella entity needs to have a minimum paid-up capital of Rs 500 crore. Also, no single promoter or promoter group should have more than 40 percent investment in the capital of the umbrella entity.
The umbrella entity shall conform to the norms of corporate governance along with ‘fit and proper’ criteria for persons to be appointed on its Board. The Reserve Bank retains the right to approve the appointment of Directors as also to nominate a member on the Board of the umbrella entity.
The Reserve Bank invites applications for the umbrella entity which shall be submitted by 26th February 2021.
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