[IMGCAP(1)]

The Indian Banks' Association plans to create a payment-and-settlement company called National Payments Corp. of India, V Leeladhar, deputy governor of the Reserve Bank of India, said late last week at an Indian banking conference. Banks would own the company, with public-sector financial institutions owning a majority share. "This umbrella organization would bring greater efficiency by way of uniformity and standardization in retail payments, expand its reach, and bring innovative payment products to augment customer convenience," Leeladhar said in a statement. The Reserve Bank, India's central bank, regulates payment and settlement systems in the country. Officials gave no date for when National Payments formally would launch, but reports indicate the company could gain necessary approvals within weeks. Banking officials expect the company to clear the way for IndiaPay, a local electronic card payment and clearing firm similar to China-based China UnionPay. An analyst tells CardLine Global the influence National Payments would have in India's card industry remains unclear. "To what extent this can be a threat to Visa and MasterCard is something that [remains to be seen] as it depends on various factors like scalability, technology, processing time and accessibility," says Prathima Rajan, an India-based analyst for United States-based Celent LLC.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry