The Finance Ministry has raised concerns over the State Bank of India (SBI), HDFC Bank and Bank of Baroda (BoB) combine which reportedly plans to jointly apply for a New Umbrella Entity (NUE) license from the Reserve Bank of India (RBI), the Economic Times reported. Given that the three banks are existing shareholders in the National Payments Corporation of India (NPCI), if their consortium were to receive an NUE license to set up a rival retail payments organisation to the NPCI, it would be a conflict of interest. So far, apart from the SBI-HDFC-BoB banking consortium, Reliance Jio Infocomm and the Tata Group are reportedly in the running to apply for an NUE license. It was also reported that tech giants like Google and Amazon may also pickup a minor stake in one of these applicants. The only entity that has formally announced that it would apply for a license is So Hum Bharat Digital, which is backed by veteran payments industry executives Navin Surya and Vishwas Patel and Yes Bank. Citing unnamed sources, the report says that the Finance Ministry does not want public sector banks to create a rival payments organisation to the NPCI as it could lead to competition and monopoly risks. SBI and HDFC Bank are the two largest banks in the country, with the largest digital banking user base. Further, the report says that business presentations by the applicants have received some push back and have been delayed which may force the RBI to extend…
