NEW UMBRELLA ENTITIES

NEW UMBRELLA ENTITIES

Subject: Economics

Context: 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).

Concept:

New Umbrella Entities (NUEs):

• NUEs will be a non-profit entity that will set-up, manage and operate new payment systems, especially in the retail space such as ATMs, white-label PoS; Aadhaar-based payments and remittance services.

Functions Envisaged:

• NUEs will develop new payment methods, standards and technologies.
• These will operate clearing and settlement systems, identify and manage relevant risks such as settlement, credit, liquidity and operation and preserve the integrity of the system.
• These will monitor retail payment system developments and related issues in the country and internationally to avoid shocks, frauds and contagions that may adversely affect the system and the economy in general.