New Delhi, Mar 2 (IANS): As digital payments in India continue to grow, several prominent business establishments in India including Reliance Industries, the Tata Group and digital payments major Paytm are reportedly in fray for setting up New Umbrella Entity (NUE) for retail payments.

Moreover, several global tech giants including Facebook, Google and Amazon have tied up with Indian organisations for being a part of such an entity which would rival the likes of National Payments Corporation of India (NPCI).

But what is the NUE licence that a number of big businesses are vying for?

The Reserve Bank of India (RBI) came up with a framework for the pan-India umbrella entity for retail payments back in August 2020, wherein the central bank said that an entity must have a minimum paid-up capital of Rs 500 crore.

The RBI notification said that the objective of the framework is to set up pan-India umbrella entity or entities focussing on retail payment systems.

"Such entity shall be a Company incorporated in India under the Companies Act, 2013 and may be a 'for-profit' or a Section 8 Company as may be decided by it," it said.

No single promoter or promoter group shall have more than 40 per cent investment in the capital of the umbrella entity.

"The promoters/promoter groups shall upfront demonstrate capital contribution of not less than 10 per cent, i.e., Rs 50 crore at the time of making an application for setting up of the umbrella entity," it said, adding that the balance capital shall be secured at the time of commencement of business or operations.

The promoter shareholding can be diluted to a minimum of 25 per cent after five years of the commencement of business of the umbrella entity and a minimum net worth of Rs 300 crore shall be maintained at all times.

The RBI said that the umbrella entity shall conform to the norms of corporate governance along with 'fit and proper' criteria for persons to be appointed on its board.

The guidelines said that the RBI retains the right to approve the appointment of directors as also to nominate a member on the board of the umbrella entity.

The apex bank has initially sought applications from the interested parties by the close of business hours on February 26 of this year, but the deadline was reportedly extended to March 31, 2021.