Nothing innovative solution presented by NUE applicants, says RBI

Six New Umbrella Entity (NUE) hopefuls, including Facebook, Google and Amazon, have failed to present any innovative solution due to which efforts to build an alternative to the NPCI have not moved ahead, the RBI said on Thursday.

A total of six consortiums which had the global tech majors teaming up with local entities including Axis Bank and ICICI Bank had applied in 2021 for the NUE licence.

"Of the proposals that we have received, we did not quite see any innovative or infrastructural solution that had come up," Deputy Governor T Rabi Sankar told reporters when asked about progress on the front.

He said the RBI has had a look at the applications, and reminded that the central bank's objective was to get some innovations into the digital payments system which is already functioning well with efforts like Unified Payments Interface.

"We wanted to bring in new ideas. We did not want something which is either incremental or a substitute of existing ideas or technologies," Sankar added.

Meanwhile, the RBI brass reiterated that the Indian banking system continues to be sound and healthy, seeking to allay any concerns about the impact of the global contagions which started with the failure of Silicon Valley Bank in the US.

"As of now Indian banking system remains sound and healthy with strong capital and liquidity position, improving asset quality, better provisioning coverage along with the improved profitability," Deputy Governor M K Jain said.

He added that prudential regulations across commercial banks are uniformly applied irrespective of asset size, which includes statutory liquidity ratio, cash reserve ratio, liquidity coverage ratio, investment fluctuation reserve or stress testing.

Deputy Governor Michael Patra pointed to findings of a recent stress test on interconnectedness, which said none of the bank's capital levels will fall below required levels even if all the non-bank lenders feared to collapse may go down.