UMBRELLA ENTITY FOR RETAIL PAYMENTS 

To empower the retail payment system in the country, Reserve Bank of India (RBI) has come up with a structure for pan India Umbrella entity for retail payments, the Central Bank has mentioned that to establish an umbrella entity for retail payment such entity must have paid-up share capital of not less than Rs 500 crores. Notification released by the Reserve Bank of India (RBI) says that the purpose of this framework is to set up a pan-India umbrella entity that focuses on the retail payment system. According to Companies Act 2013, such entities fall under Company which is incorporated in India, it may be either for-profit or for non-profit, which is Section 8 Companies. It is observed that umbrella entities shall have paid-up capital of Rs 500 crores and not more than 40 per cent investment in umbrella entities shall be with promoter or promoter group. 5 Years after the getting the ball rolling of business of umbrella entities at least 25% of promoter shareholding can be diluted and a minimum of Rs 300 crores shall be maintained all times. This will make sure that the new ATMs are effectively set up and also those ATMs which have been set up, their operation will also be ensured.

The new payment systems in the retail space comprising but not limited to ATMs will expand, for example, effectively white label PoS, Aadhaar based payments and remittance services, newer payment methods, standards, and technologies. These will also be taking care of the most essential aspect, which is the developmental objectives. Enhancement of awareness about the payment systems can be a really good example of the same. This regulation mentioned that the Reserve Bank of India (RBI) retains the right to approve the appointment of directors also to recommend a member on the Board of umbrella entity.