The Institute of Development and Research in Banking Technology (IDRBT), Hyderabad had been providing ATM switching service to banks in India through National Financial Switch . IDRBT decided to hive off its operational role on ATM switching to have focus on research and development and was looking for a suitable arrangement for shifting this business to some national level payment system organization. National Payments Corporation of India (NPCI) considered this as an opportunity and started discussions with IDRBT on the feasibility of taking over.

The Board for Regulation and Supervision of Payment and Settlement systems (BPSS) at its meeting held on September 24, 2009 has approved in-principle to issue authorisation to NPCI for operating various retail payment systems in the country. Reserve Bank of India has granted authorisation to NPCI to take over the operations of National Financial Switch (NFS) from the Institute of Development and Research in Banking Technology (IDRBT) on a ‘as is where is basis’ on October 15, 2009.NPCI has deputed its officials to IDRBT Hyderabad and NPCI has taken over NFS operations from December 14, 2009.

The Primary Site for NFS is located at Mumbai and DR site is located at Chennai.