RBI to setup committee on NUE licenses

WHY IN THE NEWS?

• The Reserve Bank of India (RBI) will set up a committee to scrutinize applications and give recommendations on New Umbrella Entity (NUE) licenses. The 5 member committee will be headed by Shri. P. Vasudevan.
• The committee will be responsible for looking into several aspects of NUE, from the macroeconomic impact of such a step to the security risks. The committee’s recommendations will be taken into consideration before doling out the licences.
• NUEs will establish their own payment infrastructure to compete with the National Payments Corp. of India (NPCI). The government hopes to build a settlement system similar to the unified payments interface (UPI) with the NUEs.
• The system will be focused on small and medium enterprises, merchants and consumers. The RBI had in August 2020 issued guidelines for creating “for-profit NUEs”