Full Form of NPCI

The full form of NPCI is the National Payments Corporation of India, 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 the Indian Banks Association. The NPCI is set under the Payment and Settlement Systems Act 2007.

The NPCI has ten core promoter banks: 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 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 banking sector with better infrastructure to bring both physical and electronic payment and settlement systems. In addition, retail payments for business and day-to-day transactions need an effective settlement system for both physical and electronic payments. To accommodate this, the NPCI exists.

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• 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 retail payment transactions. It is set under the guidance and support of the Central Bank, RBI, and the Indian Banks Association.
• Another objective of NPCI is to design and facilitate an affordable payment process or mechanism so that the commoner who makes retail payments daily benefits from the process by saving cost and time.
• Thus, NPCI exists to design and implement a nationwide, affordable nationwide mechanism for retailers to use daily without losing credibility and ensuring the same process standardizes across the country. The uniformity is also maintained.

• The vision of NPCI is to provide the country’s citizens with the best, most secure, simple, and easy-to-use payment option anywhere across the country for 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 commoner’s main interest at first and in the interest of all its member banks.
• The vision of NPCI is clear on its agenda and route map to make the payments for a commoner in day-to-day transactions and retail payments simple, digitized, and easy to use and traceable.
• We live in a digital world. With the increase in the number of retail payments transactions, it is a critical and difficult process, but by pushing toward 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. It achieves the vision of the NPCI.

• Under Section 8 of the Companies Act, found NPCI in 2008. Established by RBI and is owned by the collaboration of all the country’s major banks. The member banks pool the paid-up capital, which includes 10 of the country’s major entries.
• They formed to create nationwide standards in payments for business and retail payments. The non-executive directors appoint the board, and RBI members, who will have the final say and control over the NPCI. NPCI works with ten promoter banks, but RBI regulates it.

Below are the few services the NPCI provides to facilitate retail transactions within the domestic boundary. It created each of them with a definite purpose and has explained the same:

#1 - National Financial Switch (NFS)

The national financial switch is an ATM network through which the country maintains the ATMs (close to 2.7 ATMs). The product has an uptime above 99.50% to ensure no service interruption in real-time to the consumers.

#2 - IMPS

Immediate Payment Service, as the name indicates, through IMPS. Fifty-nine member banks facilitate this service. The money transfers immediately, even through the banks’ mobile applications. The mode of transfer can be direct, mobile, or internet banking.

#3 - National Automated clearing house (NACH)

It is a technology-backed web-based solution to make interbank high-volume periodic transactions. Payouts like dividends, salaries, and pensions are made through NACH.

#4 - Cheque Truncation System (CTS)

Through this CTS system, one can extend the cut-off time for the clearance of cheques. It provided more information transparency and the required clearing time, which is less for a check.

#5 - National Electronic Toll Collection (NETF)

NETC takes care of automated electronic toll collection across the country on all highways through FASTag RFIDs tagged to every vehicle commuting on highways.

#6 - Bharath QR

This service line handles retail payments through the Quick Response (QR) code for separate vendors. In addition, one can enable payment using QR codes through banking applications.

#7 - Domestic Cards (RuPay cards)

RuPay is a card payment scheme launched by the NPCI to facilitate debit payment within domestic boundaries using this payment gateway. The network interlinks between the member banks for real-time and quick money transfers.

#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

One can use a UPI enabled payment gateway to pay or receive funds for retail transactions across the country.

NPCI is a consortium of major banks, as the Reserve Bank of India promotes and regulates it. This body’s sole purpose is to ensure retail transactions’ payments within the domestic boundary happen smoothly and securely. The body has numerous services through which one can serve the purpose. However, with the technological advancement and increased volume of transactions in this domain, it is challenging for the NPCI to develop secure and safe solutions to offer these gateways.

The member banks form a network to coordinate themself in real-time to facilitate the quick real-time transfer of an amount from one account to another. However, with the digitization of money and mode of payment, the NPCI has a significant challenge to cope with the demand and also be able to deliver quality services without flaws.

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This article guides 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: -

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