A national digital payment network in India is set to be formed in a partnership between India’s largest conglomerate Reliance Industries and tech companies Facebook Inc, Google and fintech firm Infibeam, according to reports.
An invitation to private companies to form new umbrella entities (NUEs) for creating a payments network was given by the country’s central bank last year. the aim of this move was to create a competition for the national payment system that is currently operated by the National Payments Council of India (NPCI) which in turn will help the country’s financial sector to bring down concentrating risks in a single space.
With dozens of banks as its shareholders, including the State Bank of India, Citibank and HSBC as of March 2019, the NPCI is a not-for-profit company which was set up in 2008. The NPCI offers services including inter-bank fund transfers, ATM transactions and digital payments and thereby processes billions of dollars in payments daily.
The new group setting up the national network and led by Reliance and Infibeam were in the process of submitting their final proposal to the Reserve Bank of India, claimed a report published by India’s leading business daily Economic Times quoting information from three sources.
There were no comments in the report and other reports on the issue from Infibeam, Reliance, Google and Facebook.
According to an Assocham-PWC India study in 2019, the volume of digital payments in India could grow to about $135.2 billion by 2023.
Tech giants Facebook and Google are already in a partnership with Reliance with both the companies holding stakes in Reliance’s Jio Platforms – the business of the conglomerate that includes the groups music, movie apps and telecoms business ventures.
The deadline for all parties to submit NUE applications was extended until March 31 from February 26, the country’s central bank the Reserve Bank of India (RBI) said last week.
According to reports, it could take as long as the next six months for the RBI to review in depth all the proposals being submitted and sources do not expect the central bank to approve licenses for more than two new “for-profit” NUEs.
No comment on the issue was available from the RBI.
Previous reports in the media had claimed that there were other parties that were also planning to submit proposals for creation of the NUEs and was included a group that is led by Amazon and ICICI Bank from India. Reports also mentioned other groups led by the country’s salt-to-software conglomerate Tata Group and private lender HDFC Bank and another partnership that included largest mobile payment platform of India, Paytm, the ride hailing from of India Ola and IndusInd Bank.
(Adapted from Rreuters.com)