NPCI expands its shareholding pie

  • Fintechs, small finance and payments banks get stakes

Tarush Bhalla
Updated27 Nov 2020
NPCI operates various payment infrastructure, including UPI, Aadhaar Enabled Payment System and Bharat BillPay.mint
NPCI operates various payment infrastructure, including UPI, Aadhaar Enabled Payment System and Bharat BillPay.mint(MINT_PRINT)

Retail payments body National Payments Corporation of India (NPCI) has completed private placement of 4.63% of its equity shares worth 81.64 crore, allowing small finance and payment banks as well as fintechs to be shareholders in the entity, it said on Thursday.

NPCI had made an offer for the private placement to 131 Reserve Bank of India (RBI) regulated entities, of which 19 showed interest and were allotted shares in NPCI.

Small finance and payment banks such as AU Small Finance Bank Ltd, India Post Payments Bank Ltd, and digital payment fintechs including BillDesk, Amazon Pay, PayU India, PhonePe, Pine Labs and MobiKwik have thus joined NPCI’s shareholding with up to 0.44% each in the retail payment entity.

There are a total of 67 shareholder entities for NPCI now.

The broad-basing exercise was undertaken to further distribute the NPCI shareholding to a larger set of RBI-regulated entities and categories of payment industry participants.

Earlier, the RBI had instructed NPCI to broad base its shareholdings to represent a larger segment of participants. The Watal committee had also recommended this expansion in shareholding for NPCI, in December 2016.

The move will lure new-age entities to become participants, as NPCI expects to face competition from RBI’s recently approved New Umbrella Entity (NUE), said senior executives directly aware of the discussions.

Entities under the NUE umbrella are expected to operate pan-India retail payments systems and bring innovation to the country’s growing digital payments landscape.

“We are extremely pleased with the outcome of this exercise and the confidence expressed in NPCI’s continued growth and larger purpose. With this, we have also broad based our shareholding to include new categories such as payment banks, small finance banks and payment system operators in addition to the existing public sector, private sector, foreign, co-operative and regional rural banks,” said Rupesh H. Acharya, chief of finance, NPCI.

NPCI has also added Standard Chartered Bank, Dhanlaxmi Bank and IDFC First Bank as shareholders.

Government-owned banks such as State Bank of India, Union Bank of India, Bank of Baroda, Punjab National Bank and Canara Bank own more than 40% stake in NPCI’s shareholding.

Despite this diversification, the top 10 shareholders, which also include private banks such as HDFC Bank, Axis Bank, ICICI Bank and HSBC, own almost 77% in NPCI’s shareholding.

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