The National Payments Corporation of India (NPCI), in the third week of August 2013 planned to broaden its shareholding by inducting 49 banks as the shareholders. The capital of around 100 crore Rupees which is contributed by the banks towards shareholding, will facilitate NPCI in strengthening the retail payments infrastructure. It will also help in bringing down the transaction costs in the entire banking system.
It is important to note that at present, NPCI has ten main promoter banks which include HSBC, Citibank, HDFC Bank, ICICI Bank, Bank of India, Union Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank and the State Bank of India. Because of being the non-profit company, NPCI does not offer any dividend to these ten banks. All these banks contribute 10 crore Rupees each in the paid-up capital of NPCI.
PwC was also appointed as the consultant of NPCI in order to examine the needs and aspirations of various banks for being a part of the NPCI ownership.
NPCI drew two criterions on the basis of which 49 banks will be inducted as the shareholders. NPCI planned to get in all banks with the business size of 1 lakh crore Rupees and above that amount. At present, there are just around 35 such banks. Out of these 35 banks, 10 banks are already the members of NPCI. In the tier-II category, i.e., banks with the business size of less than 1-lakh crore Rupees, NPCCI will be inducting the shareholders on the basis of payments or volume of the transactions which they give to the company. Thereafter, NPCI will dilute.
About National Payments Corporation of India
• NPCI is the umbrella body for all retail payment systems in India.
• The central bank of India, the Reserve Bank of India set up the Board for Payment and Settlement Systems in 2005. Thereafter, RBI released a document in which setting up of NPCI as an umbrella institution for all the retail payment systems in India, was proposed.
• The primary aim or objective of NPCI was consolidation as well as integration of various systems with varying services into one common nation-wide uniform and standard business process for all retail payment systems.
• Apart from this, its objective was also to facilitate the affordable payment mechanism for the benefit of people in India as well as for helping in the financial inclusion.