Payments to remain a public good with RBI’s NUE plans on hold

With the Reserve Bank of India going slow on its plans to allow for-profit entities to roll out digital payments platforms could mean a major push to keep India’s financial services infrastructure as a public good.

International and domestic giants including Google, Amazon, Tata Group and Reliance have applied for so-called new umbrella entity licenses, with promises to usher in a new wave of transformations in digital payment and settlements.

But the NUE plan has been stuck since the applications were submitted, said a senior banker and a top fintech startup executive aware of the developments. The industry had for a while assumed this to be because of Covid and the resulting macroeconomic stress.

“We have not heard anything from RBI after the applications went through,” said the fintech executive, whose company is a part of a consortium that has applied for the license.

The Mint wrote on August 25 that RBI has put the NUE plan on hold citing data security concerns from participating global corporations.

“If RBI goes slow on NUE it will be a major victory for the segment of the industry that believes that payments should be a public good,” said the banker. “It is better for private companies to build for-profit businesses on top of a payments settlement infrastructure owned by a not-for-profit entity.”