NPCI Full Form

Introduction

When paper money was created in China in the 7th century the goal was to eradicate the problem of carrying the excessive weight of coins made of precious metals. It was an innovation that became part of the world economy for many years to come.

In recent years with the development of credit and debit cards, hard cash has become out of vogue while digital transactions became the norm. Today we can make payments using our smartphones, and all of this has been possible due to the organization known as NPCI.

What is the full form of NPCI?

NPCI stands for the National Payments Corporation of India. It is a special division working under the umbrella of the Reserve Bank of India (RBI) with support from the Indian Banks Association (IBA). its primary purpose is to operate all retail payments and settlement systems that function in India.

When first created NPCI had 10 banks as its promoters. They are as follows

• State Bank of India

• Punjab National Bank

• Canara Bank

• Bank of Baroda

• Union Bank of India

• ICICI Bank

• HDFC Bank

• Citibank

• HSBC

However, in 2016 the board shares were diluted and redistributed to involve 13 additional public sector banks, 15 private sector banks, 1 foreign bank, 10 multi-scale cooperative banks and 7 regional rural banks. This increase in promoters was a step which helped NPCI cast a wider net and provide their retail services to a large population.

The board of NPCI consists of the following members

• Mr. Biswamohan Mahapatra - Non-Executive Chairman

• Mr. Dilip Asbe - Managing Director and CEO.

Additionally, the board has members nominated from the RBI and ten crore promoter banks.

History of NPCI

The National Payments Corporation of India was established in the year 2008. It was registered as a not-for-profit organisation under the Settlement and Payment Systems Act of 2007. Its creation was monitored and promoted by the Reserve Bank of India. While NPCI was incorporated in 2008, the Certificate of Commencement of Business was not issued till April 2009.

NPCI Objectives

The primary objective of NPCI is to provide the Indian banking industry with an improved infrastructure focusing on the development of electronic and physical money transfer systems. Other objectives of NPCI are as follows

• Merging and incorporating various payment systems so that they follow a unified national standard. This will simplify the retail process by abolishing multiple standards of coverage that different banks create.

• Encouraging technological development will help improve retail payment systems which will help make the process safe, simple and efficient.

• Maintaining a singular system of payments that every retailer can use daily.

NPCI Subsidiaries

Following are some of the subsidiaries which function under NPCI

• NPCI International Payments Limited (NIPL)

The NIPL was created by NPCI to expand on a global scale. This organisation is currently in discussion with Asia, Africa and the Middle East to improve their payment infrastructure. The primary focus of NIPL is NPCI International Payments Limited (NIPL)to introduce RuPay and United Payment Interface (UPI) to the international market.

• NPCI Bharat BillPay Limited (NBBL)

In April 2021 NPCI created the Bharat Bill Payment System (BBPS). It's subsidiary which was developed due to the increased user traffic of systems like UPI, National Electronic Toll Collections, IMPS etc. NBBL is the company registered in 2020 to maintain BBPS.

Services Provided by NPCI

Following are some of the services provided by NPCI

• RuPay

RuPay is the Indian alternative to card scheme providers like Visa and Mastercard. These cards have a magnetic strip and an EMV chip in them for diverse compatibility. RuPay is compatible with all ATMs and more than 300 banks, national and rural, have begun to issue RuPay cards.

• Unified Payments Interface (UPI)

UPI is an instantaneous interbank payment system that can be used for sending and receiving money. Currently, 358 banks have incorporated UPI. if you have an account in any one of these banks, you will be able to make P2P transactions using any one of the mobile applications. UPI uses a QR code, mobile number and Aadhaar card as one of the few options to help make money transfers.