India’s conglomerate Reliance Industries has partnered with Facebook Inc, Google and fintech player Infibeam to set up a national digital payment network, Economic Times newspaper reported on Saturday, citing unnamed sources.
In 2020, India’s central bank invited companies to forge new umbrella entities (NUEs) to create a payments network that would rival the system operated by the National Payments Council of India (NPCI), as it seeks to reduce concentration risks in the space.
NPCI is a not-for-profit company, established in 2008, which as of March 2019 counted dozens of banks as its shareholders, including the State Bank of India, Citibank and HSBC. It processes billions of dollars in payments daily via services that include inter-bank fund transfers, ATM transactions and digital payments.
Citing three unnamed sources, The Economic Times said that the group led by Reliance and Infibeam was in the advanced stages of submitting their proposal to the Reserve Bank of India.
The New Umbrella Entity (NUE) will be jointly promoted by a Reliance unit and Infibeam Avenues Ltd’s subsidiary So Hum Bharat, while Google and Facebook will hold a smaller stake in the NUE license.
As per the report, former Itzcash founder and payment industry veteran Navin Surya has been appointed managing director and chief executive of the NUE.
There are various consortiums of top corporates, fintech firms and banks that are eying licence to set up an NUE. For instance, State Bank of India (SBI), ICICI Bank, HDFC Bank, Bank of Baroda, Axis Bank, Kotak Mahindra Bank and YES Bank are planning to participate to form a pan-India umbrella entity for retail payments. Besides, Amazon and Paytm have also shown interest for this new payment entity.
Earlier this week, Kotak Mahindra Bank and HDFC Bank informed the stock exchanges that they have picked up 9.99 per cent stake each in Tata group-promoted Ferbine Pvt. Ltd to apply for an NUE licence.