National Payments Corporation of India (NPCI) was developed by the Indian Banks’ Association (IBA) and the Reserve Bank of India (RBI) in an effort to create a robust Payment & Settlement Infrastructure in India under the provisions of the Payment and Settlement Systems Act, 2007.
It has been incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 (now Section 8 of Companies Act 2013), viewing its utility to provide infrastructure for operating settlement and electronic payment systems in Inda. The ten main promoter banks of NPCI are Punjab National Bank, State Bank of India, Canara Bank, Union Bank of India, Bank of Baroda, ICICI Bank Limited, Bank of India, HSBC, Citibank and HDFC Bank Limited.
Objectives of NPCI
The main objective of NPCI is to provide common people with an affordable and robust payment system. Apart from this, NPCI is also responsible for bringing together and integrating various systems into nationwide uniform and standard business processes that can be used as a retail payment system.
- The organisation aims to create a robust payment and settlement infrastructure in India.
- NPCI has been implemented as a ‘Not for Profit’ company under the provisions of Section 8 of Companies Act, 2013.
- This was accomplished with an intention to provide infrastructure to the entire Banking system in India for in-person as well as digital payment and settlement processes.
- The corporation is primarily focused on bringing innovations amidst the retail payment systems through various technological updates for ensuring higher operational efficiency rate and to strengthen the payment procedures.
- NPCI is striving hard to transform India into a ‘cashless society’ by reaching every citizen with several payment services.
- This corporation was initiated by our former President Pranab Mukherjee, endorsed by the honourable Prime Minister Narendra Modi and later framed into a card of choice for the Pradhan Mantri Jan Dhan Yojana (PMJDY)
- Thus, throughout its journey of seven years, NPCI has created a significant impact on retail payment services in the country.
Vision & Mission
The long-term vision of NPCI is to increase fund transfer options and to evolve as the best payments network internationally. And the mission of NPCI is to reach every Indian with either one or the other payment services be it in-person or through electronic methods
Values of NPCI
NPCI firmly believe that their values have eventually shaped their culture, work ethics and decisions. NPCI has also stated that their values have assisted in extending their limits and striving for a better today. So that a foundation is laid for a successful tomorrow.
The core values fostered by NPCI includes:
- Passion for Excellence
- Integrity
- Customer Centricity
- Respect
- Collaboration
Promoter Banks
The NPCI comprises of ten core promoter banks which significantly eases the transaction processes initiated through NPCI. They are enlisted as follows:
- State Bank of India
- Punjab National Bank
- Canara Bank
- Bank of Baroda
- Union Bank of India
- Bank of India
- ICICI Bank
- HDFC Bank
- Citibank
- HDFC Bank
Formation of NPCI
- Department of Payment and Settlement Systems (DPSS) provided the initial approval to issue an authorization to NPCI for operating diverse retail payment systems in the country.
- NPCI was also granted the Certificate of Authorization for operation of National Financial Switch(NFS) and the ATM Networks since 15th of October, 2009.
- The corporation has also debuted its officials to Institute of Development and Research in Banking Technology(IDRBT) Hyderabad and has taken over NFS Operations from 14th of December, 2009.
- The membership rules and regulations were framed for enrolling all banks in the country as members.
- The technical advisory committee of NPCI consists of two eminent professors namely, Prof.N.L. Sarda, the Chairman and Prof.G.Sivakumar, the Co-Chairman.
- Members in these committees are employees of various banks and are present at the level of Assistant General Manager or Deputy General Manager in their cadre.
Services Offered
The below-mentioned amenities are being offered under NPCI for providing the customers with better payment and settlement options.
- Unified Payments Interface (UPI)- It is a system which powers multiple bank accounts within a single mobile application, interlinking several bank features and assisting merchant payments under one roof. On account of this, NPCI conducted a pilot launch with its member banks. As a result, the banks have started to upload their UPI enabled applications on Google Play Store from 25th of August, 2016.
RuPay- This is a new card payment scheme launched by the NPCI and has been initiated to offer an open-loop, multilateral, domestic system for its users. It will allow all Indian banks and financial institutions to participate in electronic payments frequently. The merits of using RuPay are mentioned as follows,
1.Lower Cost and Affordability
2. Customised Product Offering
3.Protection of information related to Indian Consumers
4.Provide electronic product options to not intervened consumer segments
5.Inter-operability
6. Earn Cashback frequently
7.Insurance cover
8.Exclusive Merchant offers.
Bharat Interface for Money (BHIM)- It is an application that allows consumers to make quick and straightforward transactions through UPI. This feature also permits its users to make instant bank-to-bank payments and pay or collect money using their unique mobile number or the Virtual Payment Address. BHIM allows the user to Send money, Request money, Scan & Pay, Set privacy limits and to split bills.
Immediate Payment Service (IMPS)- This feature offered by the NPCI was launched in 2010. It provides robust, real-time fund transfer which extends 24*7*365 inter-bank electronic fund transfer services. This can be executed on multiple channels like Mobile, Internet, ATM and SMS.
National Electronic Toll Collection (NETC)- NPCI has initiated this program to meet the electronic tolling requirements of the Indian market. NETC provides an inter-operable, secure framework to its users. The benefits of NETC includes,
1.Transparency in processing transactions
2. Electronification of retail payments
3.Reduce air pollution by reducing congestion
4.Reduce fuel consumption
Bharat BillPay (BBP)-The BBP system is a one-stop ecosystem for payment of all bills providing a flexible ‘anytime anywhere’ bill payment service to all customers across India to ensure reliability and safety of transactions.
Payment Channels accepted by BBP are Internet Banking, Mobile Banking, POS, Mobile Wallets, ATM, Kiosk and through Bank Branch.
Payment Modes available in BBP are Cards (Credit, Prepaid and Debit), NEFT Internet Banking, UPI, Wallets, Aadhar based Payments and Cash.
*99# or USSD Services- NPCI’s *99# services run on USSD, which stands for Unstructured Supplementary Service Data. This service has been practiced to extend banking opportunities to every layman across the country. The customers can avail this service by dialing *99# a common number across all the Telecom Service Providers (TSP) using their mobile phones and transact through the interactive menu displayed on the screen. The primary services offered by *99# includes sending and receiving funds, balance enquiry, changing UPI PIN besides hosting other services.
National Automated Clearing House (NACH)- NPCI has introduced NACH, a web-based solution to promote inter-bank and high volume electronic transactions for banks, corporates and financial institutes. This system is used for making bulk transactions ranging from subsidies and salary till payments pertaining to electricity, telephone and insurance premium.
Cheque Truncation System (CTS)– This service offered by NPCI reduces the time required for the acceptance of customer cheques by banks. It also ensures convenient retrieval of the required information and minimizes the timeline stated by banks for clearing cheques. The operational benefit of CTS is that there are no cases of cheques lost or tampered. Economic benefits of CTS includes the elimination of cost involved in paper movement.
Aadhar Enabled Payment System (AePS)- It is a bank-led system which allows online financial inclusion transaction through the business correspondent of any bank on checking the Aadhar authentication. The various services availed under AePS are Cash Withdrawal, Cash Deposit, Balance Enquiry, Aadhar to Aadhar Fund Transfer, Finger Detection, and printing the Mini statement.
FAQs
Is NPCI a government organisation?
NPCI runs under the jurisdiction of the Reserve Bank of India and is a non-profit organisation.
Who developed the UPI system?
UPI system was developed by NPCI.
What is the role of NPCI in banking?
NPCI enables the banks participating in UPI access to system where they can raise chargebacks, download reports, update the status of UPI transactions etc.
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