The National Payments Corporation of India (NPCI) is an umbrella organization for operating retail payments and settlement systems in India, established as a not-for-profit company under Section 8 of the Companies Act, 2013. It was incorporated in December 2008 as a joint initiative of the Reserve Bank of India (RBI) and the Indian Banks' Association (IBA). The core problem it was created to solve was the need for a robust, standardized, and accessible payment and settlement infrastructure in India, operating under the provisions of the Payment and Settlement Systems Act, 2007.
The NPCI works by developing and managing key payment systems that ensure interoperability and security across the banking network. Its mechanism involves creating platforms like the Unified Payments Interface (UPI), which facilitates real-time, inter-bank transactions using a single identifier like a Virtual Payment Address (VPA). Other major systems include the Immediate Payment Service (IMPS) for 24/7 instant fund transfers, the domestic card network RuPay, and the National Financial Switch (NFS) for shared ATMs.
The NPCI is closely connected to the RBI, which guides its operations, and the IBA, which represents the promoter banks. A recent change involves the NPCI introducing major modifications to UPI from July 31, 2025, to enhance reliability and security. These changes include limiting non-financial transactions like balance inquiries to 50 per day and banning transactions where the payer and payee accounts are the same to prevent misuse. Additionally, the NPCI has been expanding its reach internationally through its subsidiary, NPCI International Payments Limited (NIPL), and has introduced features like Aadhaar-based facial recognition for UPI PIN setting.