The union representing India’s largest state-owned bank and a global coalition have asked the central bank to prohibit large companies from establishing payment networks and stated in a letter seen by Reuters on Tuesday that privatization could endanger data security.
In order to reduce the concentration risk in the payment sector, the Central Bank of India (RBI) last year invited the company to establish a so-called New Umbrella Entity (NUE) to create a payment network comparable to the country’s flagship processor, the National Payment Board of India (NPCI). ).
NUE will be allowed to operate new payment systems, including digital and ATM transactions.
Amazon, Google, Facebook and other companies have worked with Indian companies such as Reliance and ICICI Bank to apply for such licenses.
The participation of large multinational companies has raised concerns about the abuse of user data. India’s digital payment network should continue to operate on a non-profit basis. The National Bank of India (SBI) Staff Federation and the UNI Global Union have voiced the voice of the tech giants. Critics, wrote in the letter.
The letter urged the central bank to cancel “the entire process of NUE licensing” and focus on strengthening the domestic payment group NPCI, which operates as a non-profit organization.
The Reserve Bank of India did not immediately respond to a request for comment on the letter, which had not been previously reported.
Although the state-backed NPCI is the backbone of the country’s digital payment system, India is an increasingly attractive digital payment market for everyone from Amazon to Google. A 2019 study by Assocham-PWC India showed that digital payments in India may increase from 65 billion U.S. dollars (approximately 47,390 crore) in 2019 to 135 billion U.S. dollars (approximately 98,425 crore) in 2023.
In the letter, groups including the SBI Union, which represents 100,000 of its nearly 250,000 employees, and the UNI Global Union, which represents approximately 20 million employees worldwide, expressed their concerns about the NUE application filed by a consortium led by Amazon. It emphasized that the American company is facing multiple investigations into its business practices in India and abroad.
© Thomson Reuters 2021