The finance ministry has raised issues over’s plan to arrange a three-way partnership with Ltd. and underneath the central financial institution’s new umbrella entity (NUE) framework, anxious that it might squeeze the National Payments Corporation of India (NPCI).
The authorities would not need public sector banks to arrange NUEs that can rival the nation’s premier funds entity, the folks stated. The proposed three-way partnership led by SBI has been cited by finance ministry officers on the counts of potential competitors and monopoly threat, they stated.
“The finance ministry has reviewed the situation and doesn’t want state-owned banks to compete against flagship government of India projects such as RuPay and UPI (Unified Payments Interface), which are run by NPCI,” one of the individuals stated. “Concerns have been flagged around common ownership between NPCI and the bank-led NUE. This is being seen by finance ministry officials as a major competition risk.”
SBI, HDFC Bank, and Bank of Baroda didn’t reply to queries. The banks in query might go forward with separate NUE partnerships to allay the fears of the federal government and the regulator.
“Bulk of NPCI’s traffic comes from SBI and if they set up their own payments entity then it will be a slow death for the former,” stated one other individual. “But this doesn’t mean that the consortium should not be allowed to take its plans forward. SBI alone spends much more on IT infrastructure than NPCI and as a country, India needs much more competition in the payments space for a flourishing digital market.”