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NPCI Allowed Payment Banks and Fintechs in its Shareholding upto 0.44%

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NPCI allows payment banks and fintechs to be shareholdersThe National Payments Corporation of India (NPCI) has completed private placement of 4.63% of its equity shares worth Rs 81.64 crores. This placement has enabled small finance and payment banks, as well as fintechs to be its shareholders up to 0.44%.

  • With this placement, now the total shareholder entities for NPCI stand at 67.

Key Points:

–The small finance and payment banks that have joined NPCI’s shareholding include 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.

–It also added Standard Chartered Bank Ltd., Dhanlaxmi Bank Ltd. and IDFC First Bank Ltd. as its shareholders.

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

Background:

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.

This was done on the instruction of RBI to broaden its shareholdings representing a larger segment of participants. The Watal Committee, headed by former finance secretary Ratan Watal had also recommended this expansion in December 2016.

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ii.On October 15, 2020, Insurance Regulatory and Development Authority of India (IRDAI) released Guidelines for Standard Life Insurance Product ‘Saral Jeevan Bima’. The insurance scheme should be mandatorily offered by All Life Insurance Companies from January 1, 2021.

About National Payment Corporation of India (NPCI):

It is a not-for-profit organisation, and an initiative of the RBI and Indian Banks’ Association (IBA).

  • In November 2020, UPI-payments in the country crossed the 2 billion transaction count.
  • In August 2020, NPCI launched its international arm, NPCI International Payments Ltd to expand real-time payment system UPI and card payment network RuPay in other countries.

Head Office– Mumbai, Maharashtra
Managing Director (MD) & Chief Executive Officer(CEO)– Dilip Asbe
Founded – 2008
Established by – RBI & IBA (under Section 8 of the Companies Act 2013)
Regulator – RBI