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Comment by zimbatm | Hacker News Reader

The article looked great until the introduction of the NPCI system. It's essentially a single point of failure, and the best place to observe all the transaction of the whole country. It's controlled by the Government so it will be really tempting to peek into it.

> Imagine the pain that everyone has to go through in reaching a consensus when configurations or infrastructures change. It would be chaos.

Welcome to the Internet.

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So is the Federal Reserve, so is the SEC, so is the IRS, so are all the financial reporting laws that require transactions to be reported to the US government for audit and regulation. I fail to see how NPCI is any different. The solutions won't be any different either: the government has laws restricting unregulated access to data and developers will implement access controls to enforce these laws.

The financial system in practically every country is already fully controlled by a central authority, and for good reason: finance is critical to national security and financial decisions are inherently political, therefore finance is controlled by political authorities.

You are wrong on one very important point: NPCI is a non-government entity. It is a not for profit corporation that acts as a conglomeration of banks. The government gets a day in it by 1. owning public sector banks and 2. By regulating it indirectly as RBI (which is itself quite autonomous).

It is more akin to a not for profit VISA than the Fed Reserve.

> NPCI is a non-government entity

Fair correction. However, correct me if I'm wrong, it still plays the role of a singular national authority blessed by the central bank. I'm skeptical that its non-government status is an important distinction when it appears to be an exclusively Indian institution co-established by the RBI. I don't think Visa's status is quite the same: Visa has actual competitors and operates under many foreign jurisdictions. I'd say the NPCI is as trustworthy and protected as the government institutions that bless it.

Yeah, the VISA comparison isn’t apt either. Maybe if VISA had a higher market share.

The RBI initiated process to setup a parallel body to NPCI, but that will take eons in fintech time.

The non-government status is important because the NPCI fought a case (and won) to keep it out of the ambit of the Right yo Information act. It is an opaque institution with a government granted monopoly that is also simultaneously a cartel of sorts.

There are redundancies build into the NPCI system. There is more than one data center, etc.

Multiple DCs do not resolve the single-entity issue. Connectivity failures are not the only kind of failures that can happen.

The equivalent for US would be for VISA to have a marketshare of 90% and MasterCard around.

RBI floated a paper recently trying to setup a alternative body to fix this, but this might take ages.

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