Wary of the additional costs, the Reserve Bank of India (RBI) is reportedly looking to outsource direct and supervisory control over the New Umbrella Entities (NUE).
The Central Bank wants either the National Payments Corporation of India (NPCI) or a newly formed body to take over the role, the Indian Express reported, citing senior government officials in the know.
"In our initial discussions, it (high cost) was flagged more than once. Since the operations of NUEs will have financial aspects, the relevant permissions from RBI will still be needed. But the day-to-day supervision and control could be left to any other agency," the official told the publication.
Email to RBI did not elicit any response, the report said.
Moneycontrol could not independently verify the report.
Read: NPCI on its toes as RBI hunts for new umbrella entity for retail payments
In August 2020, RBI released a framework for the authorisation of an umbrella entity for retail payments in the country and had invited applications by February 26, 2021. The extended deadline to submit applications ended on March 31.
NUEs will be set up as a company as a for-profit under the Companies Act, 2013 and will get authorisation under the Payment and Settlement Systems Act, 2007 (PSS Act).
Such entities will undertake tasks such as setting up, managing and operating new payment systems in the retail space.
Also read: Why does the RBI want another entity for retail payments?
The scope of activities for the NUE, as mandated by RBI, includes payment systems in the retail space like ATMs, white-label point of sale terminals, Aadhaar-based payment systems, and remittance services, operation of clearing and settlement systems for participating banks and non-banks, be interoperable with NPCI, and participate in the Reserve Bank's payment and settlement systems.
As per the RBI rules, no single promoter can have over 40 percent stake in the NUE
. Further, the percent of stake has to be reduced to less than 25 percent within five years of operation.