Retail Payment Gateway System - RBI-NPCI (National Payments Corporation of India)


Reserve Bank of India, after setting up of the Board for Payment and Settlement Systems in 2005, released a vision document incorporating a proposal to set up an umbrella institution for all the RETAIL PAYMENT SYSTEMS in the country. The core objective was to consolidate and integrate the multiple systems with varying service levels into nation-wide uniform and standard business process for all retail payment systems. The other objective was to facilitate an affordable payment mechanism to benefit the common man across the country and help financial inclusion.

National Payments Corporation of India (NPCI) was incorporated in December 2008 and the Certificate of Commencement of Business was issued in April 2009. It has been incorporated as a Section 25 company under Companies Act and is aimed to operate for the benefit of all the member banks and their customers. The authorized capital has been pegged at INR300 crore (US$56.7 million) and paid up capital is INR60 crore (US$11.34 million) so that the company can create infrastructure of large dimension and operate on high volume resulting payment services at fraction of the present cost structure.

NPCI would function as a hub in all electronic retail payment systems which is ever growing in terms of varieties of products, delivery channels, number of service providers and diverse Technology solutions.

NPCI has a mandate to create a domestic card scheme.The Brand name finalised for the same is RuPay. This scheme would be similar to domestic card schemes one of which is China UnionPay in China. China UnionPay (CUP) was a national agenda for a few years by mandating all domestic transactions to be routed through the national card system. Now China UnionPay cards are accepted in 26 countries. The card base is 1.8 billion. Bulk of the payments are made in China by CUP cards. Although it may not be possible to mandate such transaction flow in India, a domestic card is not a distant dream if all banks work in a co-operative framework. NPCI can reach the scale of China UnionPay by excelling in service quality and by placing the next generation products and services.

Vocalink in UK provides another benchmark for NPCI. Vocalink facilitates money transfer from any bank account to any other bank account in UK on a real time 24 x 7 basis. This implies that the experience of RTGS has been extended to retail payment segment. Now that more than 60,000 bank branches in the country are covered under Core Banking Solution, this is very much a feasible proposition in India and would be known as India MoneyLine.

NPCI would also benchmark against Bankserv in South Africa and KFTC in South Korea in terms of operational efficiency, reach across the country and range of products and services.

Organisation

Presently, there are ten core promoter banks (State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC). 

Services

The corporation service portfolio now and in the future include:
  1. => National Financial Switch (NFS) which connects 100404 ATMs of 105 banks (66 member+ 39 sub-member banks)
  2. => MMID issued 36321458
  3. => Interbank Mobile Payment Service (IMPS) provided to 50 member banks which have registered more than 14 million customers
  4. => Aadhaar-enabled payment system (AEPS) - A payment system for UID based transactions.
  5. => RuPay - Domestic Card Scheme
  6. => Cheque Truncation System (CTS)
  7. => National ACH Service

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