46 new banks get NPCI shares

Mumbai: The National Payments Corporation of India (NPCI) has issued additional shares to 46 new banks to broaden its shareholding, hitherto held by 10 promoter banks. The move follows a nudge from the Reserve Bank of India (RBI), which wanted the payments infrastructure provider to represent interests of all segments in the industry. The 46 new shareholders are 13 government-owned banks, 15 private banks, one foreign bank, 10 multi-state cooperative banks and seven regional rural banks (RRBs) which are now shareholders.

Until now six PSU banks, two private banks and two foreign banks held 10% each of the bank’s equity capital and had a strong say in its workings. NPCI, as infrastructure provider and regulator, had a lot of influence in pricing of electronic transactions including fees for ATM usage.
“The promoters will continue to retain their status. It is just that more shareholders have joined. The RBI wanted that the shareholding of NPCI should be broad-based and it should not be driven by a limited number of banks,” said A P Hota, MD & CEO, NPCI. He added that the public sector will always have a majority with shareholding of over 51%. Post-dilution, the share of PSU banks has come down to 57% from 60% earlier. Also, the promoter’s shares have come down from 100% to 75%.
“This was not a capital-raising exercise. Since we are a not-for-profit organization, there was not much of a premium charged but the pricing was close to book value,” said Hota. He said that the corporation was always driven by public interest. But now with the widening of the shareholder base, the public interest objective was included in letter as well as spirit, he said. The NPCI board may also see new members. “That would happen, but that is the next stage. The current objective was to broad-base the shareholding,” said Hota.