Page 34 - Banking Finance December 2021

ARTICLE

Act,1999(FEMA) as amended from time to time with 3 years Y Convicted by a court for any offence involving moral
experience in the payments ecosystem as Payment System turpitude or any economic offence or any offence under
Operator / Payment Service provider / Technology Service the law administered by the RBI
Provider. The shareholding pattern shall be diversified, Any
Y Declared insolvent and not discharged
entity holding more than 25% of the paid up capital of the
umbrella entity shall be deemed to be a promoter. The Y An order restraining, prohibiting or debarring the person
Memorandum of Association of the applicant entity must from accessing/ dealing in any financial system, passed
cover the proposed activities of operating a pan-India by any regulatory authority, and the period specified in
umbrella entity for retail payment systems. the order has not elapsed

Y Found to be of unsound mind by a court of competent
If any Foreign Direct investment (FDI) / Foreign Portfolio jurisdiction and the finding is in force and
Investment (FPI) entity then It shall additionally fulfill
Y The capital requirements as applicable under the rules Y Is financially not sound
/ regulations framed under FEMA, as amended from
time to time If any question arises as to whether a person is a fit and
proper person, then the RBI's decision on such question shall
Y They submit necessary approval from the competent
be final.
authority as required under rules / regulations framed
under FEMA, as amended from time to time
Requirement of Capital: The new umbrella entity shall
Fit and proper criteria: The Promoters / Promoter Groups, have a minimum paid up capital of Rs 500 crore. No single
shall conform to the Reserve Bank's "fit and proper" criteria Promoter/ promoter Group shall have more than 40%
Director of a Promoter Company / Group Company shall be investment in the capital of the umbrella entity. The
deemed to be a "fit and proper" person if: Promoters/ Promoter Groups shall upfront demonstrate
capital contribution of not less than 10% i.e. Rs.50 crore at
Such person has a record of fairness and integrity, including the time of making an application for setting up of the
but not limited to umbrella entity. The balance capital shall be secured at the
Y Financial integrity time of commencement of business / operations. The
Y Good reputation and character and Promoter / Promoter Group shareholding can be diluted to
a minimum of 25% after 5 years of the commencement of
Y Honesty
business of the umbrella entity. A minimum net worth of Rs
300 crore shall be maintained at all time.
Such person has not incurred any of the following
disqualification:
Scope of New Umbrella entity:
Y To set up, manage and operate new payment systems
in the retail space comprising of but not limited to ATM,
White Label Pos, Aadhaar based payments and
remittance services newer payment methods, standards
and technologies, monitor related issues in the country
and internationally take care of developmental
objectives like enhancement of awareness about the
payment systems

Y To operate clearing and settlement systems for
participating banks and non banks identify and manage
relevant risks such as settlement, credit , liquidity and
operational and preserve the integrity of the system,
monitor retail payment system developments and

34 | 2021 | DECEMBER | BANKING FINANCE