Subsequent to the notification of Payment and Settlement Systems Act, 2007, the payment services have been opened up in India for non-bank service providers also. The broad regulatory approach of RBI towards non-banks has been to permit these entities to provide payment services which are fee-based without access to funds of the customers.
Other institutions, mindful of the possibility of contagion if a run got going, might support one of their competitors provided there was a reasonably held expectation of solvency. But if the confidence shock was more systemic in nature the question was how the whole system could be supported.