The retail payments body, National Payments Corporation of India (NPCI), said on Thursday that it has completed the private placement of 4.63% of its equity shares. ₹Rs 81.64 crore, allowing small finance and payment banks as well as fintechs to be shareholders in the organization.
NPCI had made an offer for the private placement to 131 regulated entities of the Reserve Bank of India (RBI), of which 19 showed interest and were assigned shares in NPCI.
With this small financing and payment banks such as AU Small Finance Bank Ltd., India Post Payments Bank Ltd., and digital payment fintechs such as BillDesk, Amazon Pay, PayU India, PhonePe, Pine Labs and MobiKwik have joined the participation of NPCI and hold up to 0.44% each in the retail payments entity.
NPCI’s total number of shareholders now stands at 67.
According to NPCI, this broad-based exercise was conducted to further diversify and distribute NPCI’s equity interest to a broader set of RBI-regulated entities and categories of payments industry participants.
Previously, the RBI had directed NPCI to expand its shares to represent a larger segment of participants. In addition to this, the Watal Committee had also recommended this expansion in NPCI’s stake, in December 2016.
Senior payments executives, directly aware of the discussions, also said that this further privatization will attract new-age entities to participate, as NPCI hopes to face competition from RBI’s recently approved New Umbrella Entity (NUE), in the future.
NUE umbrella entities are expected to operate retail payment systems throughout India and bring innovation to India’s growing digital payments landscape.
“We are very satisfied with the outcome of this exercise and the confidence expressed in the continued growth and broader purpose of NPCI. With this we have also expanded our equity participation to include new categories such as payment banks, small financial banks and payment system operators, in addition to existing rural banks in the public, private, foreign, cooperative and regional sectors, “said Rupesh H Acharya , Director of Finance, NPCI.
In addition to the new age entities, NPCI has also added Standard Chartered Bank Ltd., Dhanlaxmi Bank Ltd. and IDFC First Bank Ltd. as its shareholders.
Currently, state-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% of NPCI shares.
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% of NPCI’s equity stake.
NPCI is a non-profit organization and an initiative of the RBI and the Indian Banks Association (IBA). Currently, the company operates various payment infrastructures, including: Unified Payment Interface (UPI), Aadhaar Enabled Payment System (AePS), Bharat BillPay, among others.
Last month, UPI payments in the country crossed the 2 billion transaction count.
Despite the milestone, the NPCI CEO said there is still a lot of room for growth as more use cases await approval. Asbe added that UPI payments could reach a billion over the next two to three years as new use cases emerge.
In August, NPCI launched its international arm, NPCI International Payments Ltd, to expand the UPI real-time payment system and the RuPay card payment network in other countries.
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