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Mar 31, 2012, 07.53 PM IST | Source: Moneycontrol.com

Banks eyeing stake in National Payment Corporation

At least five banks are eyeing stakes in National Payment Corporation of India (NPCI), the nodal agency for the first-ever indigenous payment gateway – RuPay, which charges banks a lower rate as compared to other two payment gateways: Visa and MasterCard.

Banks eyeing stake in National Payment Corporation
Saikat Das
Moneycontrol.com

At least five banks are eyeing stakes in National Payment Corporation of India (NPCI), the nodal agency for the first-ever indigenous payment gateway – RuPay, which charges banks a lower rate as compared to other two payment gateways: Visa and MasterCard.

Currently, five banks including Axis Bank, IDBI Bank, Central Bank of India, Standard Chartered Bank and Corporation Bank are looking to own a part of NPCI, an industry source familiar with the development told Moneycontrol.com.

NPCI was established in late 2009. In 2010, ten banks including State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC had picked up 10% stake each in the NPCI.

Each bank had infused Rs 6 crore to bring in Rs 60 crore in total. The authorized capital has been pegged at Rs 300 crore

Narayana Murthy, former chairman, Infosys Technologies is the present chairman of NPCI as nominated by the Reserve Bank of India. An email sent to NPCI remained unanswered at the time of writing this article.

Also read: This is how RuPay plans to battle with Visa and MasterCard

Moneycontrol.com has learnt that the top management of NPCI is not so keen in expanding the equity base. It currently wants to focus more in generating business volume. Moreover, the existing banks are not in favour of increasing the number of promoters. Even, they are ready to bring in more capital to the organization.

“The proposal is under discussion. We are hopeful to get the nod. If we have a say in their governance, we can also suggest in their product designing. RuPay will gradually emerge as a major payment gateway wherein all banks will subscribe,” said a top official from the Central Bank of India.

Another top official from the IDBI Bank confirmed the development adding that the final decision is not yet taken. Emails sent to Axis Bank and Standard Chartered Bank did not elicit any response.

NPCI was incorporated as a section 25 company under the Companies Act. Hence, it is not bound to give any dividend or share of profit to its promoters. Rather, it has the mandate to redeploy any gains back into the business.

saikat.das@network18online.com

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