SBI Union, Others Urge Central Bank to Scrap Digital Payments Plan, Letter Shows


A union representing India’s largest state-run bank and a global alliance have asked the central bank to bar large companies from setting up payment networks, saying in a letter seen by Reuters on Tuesday that privatisation could compromise data safety.

In a bid to reduce concentration risks in the payments sector, India’s central bank (RBI) last year invited companies to forge so-called New Umbrella Entities (NUEs) to create a payments network that would rival the country’s flagship processor, the National Payments Council of India (NPCI).

The NUE will be allowed to operate new payment systems including digital and ATM transactions.

Amazon, Google, Facebook, and others have applied for such licences in partnership with Indian companies such as Reliance and ICICI Bank.

Involvement of big multi-national companies raises fears of abuse of user data and India’s digital payment networks should continue to operate on a non-profit basis, the All India State Bank of India (SBI) Staff Federation and the UNI Global Union, a vocal critic of tech giants, wrote in the letter.

The letter urged the central bank to scrap the “whole process of NUE licensing” and focus on strengthening the domestic payments group, NPCI, which operates as a non-profit.

The RBI did not immediately respond to a request for comment on the letter, which has previously not been reported.

While state-backed NPCI forms the backbone of the country’s digital payments system, India is an increasingly attractive digital payments market for everyone from Amazon to Google. An Assocham-PWC India study in 2019 said digital payments in India could rise to $135 billion (roughly Rs. 9,84,250 crores) in 2023 from $65 billion (roughly Rs. 4,73,900 crores) in 2019.

In the letter, groups including the SBI union, which represents 100,000 of its nearly 250,000 employees, and UNI Global Union, that represents about 20 million workers globally, specifically raised concerns about the NUE application by a consortium led by Amazon. It highlighted the US company was facing several investigations into its business practices in India and abroad.

© Thomson Reuters 2021

Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.


Related Articles

Leave a Reply

Your email address will not be published.

Back to top button

Adblock Detected

Please close Adblocker