Payment banks: NPCI to double capacity to 100 million transactions per day

With Reserve Bank granting permission to open 11 payments banks, the National Payments Corporation of India (NPCI) is more than doubling its server capacity to handle 100 million transactions a day.

"We are ramping up the switching capacity from 40 million per day to 100 million. We are fully geared for all the payments banks," its managing director and chief executive A P Hota said last week.

He said the RBI-promoted NPCI, which hosts switches necessary for completing financial transactions, has already floated a request for proposal (RFP) for the same and expects to finish the ramp-up in three years.

At present, it has capacity to handle 40 million transactions a day and has witnessed it reaching a peak of 13 million, he said.

"We are doing a futuristic switch that has a capacity of 100 million because we believe that in the next 5-6 years, volumes (of transactions) will grow 4-5 fold," he added.

With an eye on deepening financial inclusion, the Reserve Bank gave in-principle nod to 11 entities to start a Payments Bank, which will help people do more transactions like fund transfers, bill payments, recharges etc.

The successful aspirants include deep pocketed entities which have been backed by industrial families like the Ambanis, Birlas, Mahindras, Sanghavis, Mittals, and also the Department of Post.

Experts have been saying that the introduction of the PBs, where the RBI has shown a bias to services like mobile phones having a huge network, will see a huge spurt in transaction volumes as each of the players gets busy to leverage its network and earn more fees.