Page 39 - Banking Finance January 2022

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Need for NUEs: more than 40% investment in the capital of the
entity.
Y Limitations of NPCI: Currently, the umbrella entity for
providing retail payments system is NPCI, which is a non- O A minimum net worth of Rs. 300 crore should be
profit entity, owned by banks. maintained at all times.
O NPCI operates settlement systems such as UPI, Y Governance Structure: The NUE should conform to the
AEPS, RuPay, Fastag, etc. norms of corporate governance along with 'fit and
O Players in the payments space have indicated the proper' criteria for persons to be appointed on its board.
various pitfalls of NPCI being the only entity O The RBI retains the right to approve the
managing all of retail payments systems in India. appointment of directors as also to nominate a
Y To Increase Competitiveness: RBI's plan to allow other member on the board of the NUE.
organizations to set up umbrella entities for payments Y Foreign Investment: Allowed in NUEs as long as they
systems aims to expand the competitive landscape in comply with the existing guidelines.
this area.
O Players planning to establish these NUE aim to get Conclusion
an even bigger share in the digital payments sector.
The Reserve Bank of India's move to allow new umbrella
entities (NUEs) for operating pan-India retail payments
Guidelines to be followed for NUEs: systems has put pressure on the National Payments

Y Owned and Controlled by Residents: The promoter or Corporation of India (NPCI) to continue its innovation in
the promoter group for the NUE should be 'owned and payments system, options for the customers, more power
controlled by residents' with 3 years' experience in the to the customers while doing the digital payments. With
payments ecosystem. NUE going to be functional the innovation level by
O The shareholding pattern should be diversified. Any implementing the latest technologies such as AI, Block
entity holding more than 25% of the paid-up capital Chains, RPA etc are going to be developed by the NUE and
of the NUE will be deemed to be a promoter. in this way more innovative payment options are going to

Y Capital: The umbrella entity shall have a minimum paid- be brought out which will project India as a pioneer in the
up capital of Rs. 500 crore. payments system just like how our IMPS technology is very
O No single promoter or promoter group should have well portrayed around the world. T

AU Small Finance Bank appoints former RBI deputy gover-

nor H R Khan on board

AU Small Finance Bank said it has appointed Harun Rashid Khan as Non-Executive Independent Director (Additional
Director) on the Board, for a period of three years, effective immediately.
Khan is a former Deputy Governor and the Executive Director at the Reserve Bank of India (RBI) and has over four
decades experience in Banking & Finance, Payment and Settlement systems, Economics and Financial Markets, said
AU in a stock exchange announcement.

At RBI, Khan worked across departments including financial markets, foreign exchange management, external in-
vestments, banking regulation and supervision, IT transformation, payment and settlement systems, training and
HR initiatives and financial inclusion.
During his RBI stint, Khan chaired the committee on rural credit and micro finance, which focused on expansion of
banking network through the Information and Communications Technology (ICT) enabled business correspondents.
Besides, Khan was also the member of the committees on digital payments set up by the government and the RBI.
This appointment is part of AU Small Finance Bank's effort to expand and strengthen its Board by inducting profes-
sionals with diversified experience across banking and finance, the company said.

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