Watch Free Classes

Introduction

  • National Payment Corporation of India (NPCI) is an umbrella organization for operating retail payments settlement systems in India.
  • NPCI was established jointly by the Reserve Bank of India (RBI) and Indian Bank’s Association (IBA) under the Payment and Settlement Systems Act of 2007 for creating a robust Payment & Settlement Infrastructure in India.
  • NPCI was registered as a non-profit organization under the Companies Act of 1956 (Now Companies Act of 2013). 

Functions of NPCI

  • NPCI facilitates all the retail payments in India.
  • NPCI operates the RuPay card network, which is India’s domestic card network.
  • NPCI operates the Unified Payments Interface (PUI), which is a real-time payments system that allows for instant payments between bank accounts. 
  • NPCI acts as National Automated Clearing House (NACH), an offline web based system for bulk push and pull transactions. NACH provides an electronic mandate platform to register mandates facilitating paperless collection processes for the corporates and banks. It provides for both account based and Aadhaar based transactions.
  • NPCI manages the National Financial Switch (NFS). NFS is the largest network of shared Automated Teller Machines (ATMs) in India facilitating interoperable cash withdrawal, card to card funds transfer and interoperable cash deposit transactions among other value-added services in the country. 

NFS was created by the Institute for Development and Research in Banking Technology (IDRBT), an institution exclusively focused on banking technology, established by the Reserve Bank of India (RBI) in 1996.  NFS was later taken over by NPCI in 2009.

Major NPCI Products

  • RuPay: RuPay is India’s first domestic Debit and Credit Card payment network, and it carries out the RBI’s vision of a “less-cash” economy. RuPay card has been introduced in the following countries: Bhutan, Maldives, UAE, Bahrain, Saudi Arabia. 
  • Bharat Interface for Money (BHIM): BHIM is a mobile payment app that allows users to make quick transactions using Unified Payments Interface (UPI). 
  • Aadhaar Enabled Payment System (AePS): It allows people to carry out financial transactions on a Micro-ATM using the Aadhaar authentication. 
  • Bharat Bill Payment System (BBPS): BBPS is an interoperable platform that allows a customer to pay bills like water, telephone, gas, direct-to-home (DTH) and electricity at a single location—electronic or physical.