Reliance, Google, Facebook Team Up To Create NUE Rival For NPCI

Reliance, Google, Facebook Team Up To Create NUE Rival For NPCI

SUMMARY

Infibeam subsidiary ‘So Hum Bharat’ will also be a part of the new umbrella entity consortium

Google and Facebook will hold smaller stakes in the consortium run by Reliance Industries Limited

Other groups led by Amazon, Tata Group and State Bank of India have also applied for an NUE license from RBI

Mukesh Ambani-led Reliance Industries is reportedly teaming up with investors Google and Facebook, along with Infibeam Avenues subsidiary So Hum Bharat, to apply for the new umbrella entity (NUE) license from the Reserve Bank of India (RBI). Facebook and Google will hold smaller stakes in the consortium.

The consortium is currently working on a detailed plan for this venture, which will pit them against the National Payments Corporation of India (NPCI) to develop a separate retail payments network like the unified payments interface (UPI) or RuPay. The companies are yet to submit their plans to the RBI for the NUE licence but have been in talks with the central bank over the past few months to ensure compliance ahead of the formal presentation of the bid.

According to an ET report, former Itzcash founder and payment industry veteran Navin Surya has been appointed managing director and chief executive of this entity.

While Reliance, Facebook and Google did not respond to the queries shared by the publication, an Infibeam Avenues spokesperson said, “We are bound by the confidentiality of the process and cannot comment.”

Looking at the success of UPI and other digital payments systems in India, RBI had decided to allow NUE bids in August 2020. The only differentiator between NPCI and the NUE was that the latter would be a ‘for-profit’ venture to develop and push digital payments technology solutions. Meanwhile, NPCI has launched projects with the same objective, however, it is not expected to generate profits.

RBI recently extended the deadline for NUE applications to March 31, 2021, and the central bank is expected to study the proposals over the next six months. Besides Reliance, consortiums led by Amazon and the Tata Group are also among other applicants.

Even the state-run State Bank of India (SBI) has partnered with HDFC Bank and Bank of Baroda (BoB) to apply for a NUE license and launch a rival payments network to NPCI. Interestingly, the state banks collectively own a 24.2% stake in NPCI and process more than 50% of all digital transactions through their own apps and third-party partnerships for UPI.

The finance ministry has raised red flags over state banks’ run-up for the license. The ministry is worried that the involvement of public sector banks could limit the success potential of state-run NPCI’s many projects, including RuPay, IMPS and UPI.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Reliance, Google, Facebook Team Up To Create NUE Rival For NPCI-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Reliance, Google, Facebook Team Up To Create NUE Rival For NPCI-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Reliance, Google, Facebook Team Up To Create NUE Rival For NPCI-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Reliance, Google, Facebook Team Up To Create NUE Rival For NPCI-Inc42 Media
Reliance, Google, Facebook Team Up To Create NUE Rival For NPCI-Inc42 Media
You’re in Good company