1. INTRODUCTION
In its financial stability report dated December 27,
2019,1 the Reserve Bank of India (the
"RBI") proposed the New Umbrella Entity
(the "NUE") for retail payment systems,
to offer alternative digital retail payment systems to the
consumers, in a space which has been dominated by the National
Payments Corporation of India (the
"NPCI") since a decade now.
The RBI issued a Press Release on February 10, 2020, placing on
its website a 'draft framework for authorization of a pan-India
New Umbrella Entity (NUE) for Retail Payment Systems' (the
"Draft Framework")2.
The Draft Framework is a welcome move by the RBI towards setting
up an alternative to the NPCI in response to emerging issues of
concentration risk and lack of fall back arrangements in times of
operational downtime. It is also aimed at increasing competition
and fostering innovation and upgradation in payments systems in
India. However, there are concerns in the industry as to how it
