BENGALURU: Several leading entreprenuers in the payments sector, including Paytm’s Vijay Shekhar Sharma and PhonePe’s Sameer Nigam, recommended to the Prime Minister and the government that the National Payment Corporation of India (NPCI) be made a neutral body to ensure a level-playing field between banks and private tech companies.
The payment leaders brought up issues from the payment industry around NPCI’s backing of BHIM app and the government outlaying nearly Rs 500 crore for cashback and bonus only for this UPI app, at the NITI Aayog event held last week, reiterating the suggestions made by the Watal Committee.
Around 74.7 per cent of the shareholding of NPCI is held by 10 promoter banks. Last year, NPCI broad-based its shareholding base to 56 banks from 10 banks earlier, and the shareholding of public sector banks as a group is now 57 per cent, while that of private sector banks is 17 per cent.
Sharma and Nigam were not available for comments. “We asked that NPCI must not be only owned by banks and that it should ensure there is a level-playing field between banks and other players,” the person cited above said.
The Ratan Watal committee report released last year had also recommended that NPCI move towards diffused shareholding while also stating that the ownership structure of NPCI might be conflicted with its pivotal role in the digital payments ecosystem.
“The committee feels that it might be desirable to explore ways in which the shareholding could be diffused, and ownership of NPCI be demutualised from the payment system participants. For example, at least 51 per cent of the paid up equity share capital could be held by the public, with no person individually or through persons acting in concert should hold more than 5 per cent of the shares of the company,” the committee said.
Another major contention is NCPI keeping UPI open only to banks, another point raised at the event. Several payment companies have in the past asked for direct UPI access instead of having to go only through banks, with the Watal committee also recommending that payment systems be opened to non-banks as well. Some other points raised by the payments group were about the need to reduce the merchant discount rate to promote digital transactions.
“The government said they will take up the points for consideration,” the person said. Earlier this week, several other fintech players from the lending side also participated in the event and made recommendations around financial inclusion to the prime minister.