Mumbai, Aug 18 (IANS): The Reserve Bank of India (RBI) on Tuesday came up with a framework for pan-India Umbrella Entity for Retail Payments, wherein the central bank has said that an entity must have a minimum paid-up capital of Rs 500 crore for setting up an umbrella entity for retail payment.

The RBI notification said that the objective of the framework is to set up pan-India umbrella entity or entities focussing on retail payment systems.

"Such entity shall be a Company incorporated in India under the Companies Act, 2013 and may be a 'for-profit' or a Section 8 Company as may be decided by it," it said.

It said that the umbrella entity shall have a minimum paid-up capital of Rs 500 crore. No single promoter or promoter group shall have more than 40 per cent investment in the capital of the umbrella entity.

"The promoters/promoter groups shall upfront demonstrate capital contribution of not less than 10 per cent, i.e., Rs 50 crore at the time of making an application for setting up of the umbrella entity," it said, adding that the the balance capital shall be secured at the time of commencement of business or operations.

The promoter shareholding can be diluted to a minimum of 25 per cent after five years of the commencement of business of the umbrella entity and a minimum net worth of Rs 300 crore shall be maintained at all times.

The RBI said that the umbrella entity shall conform to the norms of corporate governance along with 'fit and proper' criteria for persons to be appointed on its board.

The guidelines said that the RBI retains the right to approve the appointment of directors as also to nominate a member on the board of the umbrella entity.

The apex bank has sought applications from the interested parties by the close of business hours on February 26, 2021. The Reserve Bank will endeavour to complete the process within a period of six months, it said.