Full Form of NPCI – National Payments Corporation of India
The full form of NPCI is the National Payments Corporation of India is a collective organization for all the retail payment companies in India. NPCI is set up under the Reserve Bank of India (RBI) and supported by Indian Banks Association. The NPCI is set up under the provision of the payment and settlement systems act 2007.
The NPCI has ten core promoter banks, namely SBI, PNB, Canara Bank, Bank of Baroda, Union Bank of India, ICICI bank, HDFC bank, Citibank, and HSBC). NPCI has made a significant impact on the retail payment in recent times when the whole digitization of money and electronic money is encouraged by India’s government.
The main agenda of NPCI is to provide the whole banking sector with better infrastructure to bring both physical and electronic payment and settlement systems. The retail payments for business and day-to-day transactions need to have an effective settlement system for both physical and electronic payments. To accommodate this, the NPCI exists.
- The main objective of NPCI is to consolidate, combine, and integrate multiple systems for payment with different service levels into one nationwide standard uniform and business process for all the retail payment transactions. It is set up under the guide lance and support of the central bank RBI and the Indian Banks Association.
- Another objective of NPCI to design and facilitate an affordable payment process or mechanism so that the common man who makes retail payments on a day-to-day basis benefits from the process by saving the cost and time.
- Thu,s NPCI exists in designing and implementing a nationwide mechanism that is affordable for retailers to use on a day-to-day basis without losing credibility and making sure the same process is standardized across the country. The uniformity is also maintained.
- The vision of NPCI is to be able to provide the citizens of the country the best, secure, simple, and easy to use payment option anywhere across the country for the retail payments in a significantly cost-effective way. The payments can be for day to day transactions also. NPCI’s main aim is to operate the common man’s main interest at first and to the interest of all its member banks.
- The vision of NPCI is very clear on its agenda and route map to make the payments for a common man in day-to-day transactions and retail payments to be made simple, digitized, and easy to use and traceable.
- It is clear that we live in the digital world. With the increase in the number of transactions of retail payments, it is a critical and difficult process, but by pushing towards digital money and payment portals, no doubt the tracking and ease of usage have a significant impact. The whole transaction can be made secure and credible. This is achieved as the vision of the NPCI.
Formation of NPCI
- Registered under section 8 of the companies act, NPCI was founded in the year 2008. It was established by RBI and is owned by the collaboration of all major banks of the country. The paid-up capital is pooled in by the member banks, which included 10 of the country’s major entries.
- The NPCI is formed to create nationwide standards in payments for business and retail payments. NPCI works with 10 promoter banks but is regulated by the RBI. The board is appointed with the non-executive directors who are also RBI members, who will have the final say and control over the NPCI.
Below are the few services offered by the NPCI to facilitate the retail transactions in the domestic boundary. Each of them is crated with a definite purpose, and the same has been explained:
#1 – National Financial Switch (NFS)
The national financial switch is an ATM network through which the ATMs across (close to 2.7 ATMs) the country is maintained. The product has an uptime above 99.50% to make there is no interruption of service in real-time to the consumers
#2 – IMPS
Immediate Payment Service, as the name, indicates through IMPSIMPSThe full form of IMPS is Immediate Payment Service. It is one of the systems used for the purpose of instant interbank transfer of funds electronically through different channels like mobile banking, internet banking, ATM, etc. where the facility of such transfer is available whole year 24/7 including on the public holidays and weekends.. The money can be transferred immediately, even though the mobile applications of the banks. The mode of transfer can be direct, mobile, and internet banking. 59 member banks facilitate this service.
#3 – National Automated clearing house (NACH)
It is a technology backed web-based solution to make interbank high-volume periodic transactions. Pay-outs like dividends, salaries, the pension can be done through NACH.
#4 – Cheque Truncation System (CTS)
Through this CTS systemCTS SystemCTS is Cheque Truncation System. It is a clearance system for cheques used by the Reserve Bank of India (RBI) for faster cheque clearances. Instead of using the cheque’s physical copy, CTC uses the electronic image of the cheque along with relevant cheque details., the cut off time for clearance of cheque can be extended. This provided more transparency of information, as well as the clearing time required, which is less for a cheque.
#5 – National Electronic Toll Collection (NETF)
NEFT has been created to take care of automated electronic toll collection across the countries in all highways through Fastag RFIDs tagged to each and every vehicle commuting in highways.
#6 – Bharath QR
This service line is taking care of retail transaction payments through the Quick Response (QR) code for separate vendors. Payment using QR codes can be enabled through the banking applications.
#7 – Domestic Cards (RuPay cards)
Rupay is a card payment scheme launched by the NPCI to facilitate the debit payment in domestic boundaries using this payment Gateway. The network is interlinked between the member banks for real-time and quick money transfer.
#8 – Aadhaar Enabled Payment System (AEPS)
This payment vertical enables the retail transaction through the authentication of the Aadhaar card linked to that bank account during the customer’s enrollment.
#9 – BHIM
A UPIUPIUPI stands for Unified Payments Interface. UPI is a real-time payment interface developed by the NPCI that allows for instant transfers between two bank accounts while also incorporating multiple bank accounts into one interface, removing the need to manage multiple accounts while making payments for purchases or to peers. enabled payment gateway, which can be used to pay or receive funds for retail transactions across the country.
NPCI is a consortium of major banks as its promoters and is regulated by the Reserve Bank of India. This body’s sole purpose is to make sure the payments for retail transactions inside the domestic boundary happen smoothly and securely. The body has numerous services through which the purpose can be served. With the technological advancement and increase in the volume of transactions in this domain, it is challenging for the NPCI to come up with secure and safe solutions to offer these gateways.
The member banks form a network to co-ordinate them-self in real-time to facilitate real-time quick transfer of an amount from one account to another account. With the digitization of money and mode of payment, the NPCI has a significant challenge to cope up with the demand and also be able to deliver quality services without flaws.
This has been a guide to the full form of NPCI (National Payments Corporation of India). Here we discuss the objectives, vision, formation, and services of NPCI. You may refer to the following articles to learn more about finance –