SBI Employee Union Don’t Want Private Firms To Launch Payment Services: Find Out Why?
Citing that privatisation could compromise data safety, the central bank has been asked by a union representing India’s largest state-run bank and a global alliance to bar large companies from setting up payment networks.
In order to create a payments network that would rival the country’s flagship processor, the National Payments Council of India (NPCI) and in a bid to reduce concentration risks in the payments sector, India’s central bank (RBI) last year invited companies to forge so-called New Umbrella Entities (NUEs).
Digital as well as ATM transactions shall be operated by the NUE. In partnership with Indian companies such as Reliance and ICICI Bank, global players like Amazon, Google, Facebook and others have applied for such licences.
Union Urges To Scrap the NUE Licensing
However, the involvement of big players raises eyebrows as far as the user data abuse is concerned.
In a letter, the vocal critic of tech giant, the UNI Global Union with the All India State Bank of India (SBI) Staff Federation asked that the digital payment networks of the nation should continue to operate on a non-profit basis.
In the letter, they have urgent he central bank to focus on the strengthening the non-profit NPCI domestic payments group in addition to scraping the “whole process of NUE licensing”.
The Growing Digital Payments Market
Right from Amazon to Google, India is an increasingly attractive digital payments market for everyone. The state-backed NPCI forms the backbone of the country’s digital payments system. The digital payments in India could rise to $135 billion in 2023 from $65 billion in 2019 said an Assocham-PWC India study in 2019.
Concerns about the NUE application by a consortium led by Amazon were raised by the groups including the SBI union, which represents 100,000 of its nearly 250,000 employees, and UNI Global Union, which represents about 20 million workers globally. Several investigations into its business practices were being faced by the U.S. company in India as well as abroad.