The National Payments Corporation of India is all set to receive funding from a host of foreign and private banks after it started the process of increasing its paid-up capital by broad-basing its stakeholder base of 10 banks.
Acording to A P Hota, MD and CEO, NPCI, “The Corporation is targeting to raise nearly Rs 60 crore from at least 15 banks by the end of November. We invited 64 banks and quite a few have already responded,” he said.
NPCI has authorised share capital of Rs 300 crore and paid up capital of Rs 100 crore. Its existing promoter banks are State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank, Bank of Baroda (BoI), Union Bank of India (UBI), Bank of India (BoI), ICICI Bank, HDFC Bank, Citibank and HSBC. Each of these banks had contributed Rs 10 crore to NPCI’s paid-up capital.
The other banks that are contributing include Axis Bank, Kotak Mahindra Bank, IndusInd Bank, Standard Chartered Bank and Deutsche Bank. Of the PSBs, Indian Bank, Syndicate Bank, Corporation Bank and Dena Bank have participated.
The Corporation has received an investment commitment of Rs 30 crore and expects to raise another Rs 20-30 crore before the last week of November.
“We are pretty confident we will get about Rs 50-60 crore. We have received commitment of about Rs 30 crore from 13-15 banks. We expect 25 banks to participate out of the 64 that we had invited before November 23”, Hota said. “The money raised will be used to build a new payments switch of 100 million capacity, for research & development, building a new campus and for building new products,” he added.
In addition to it, NPCI is looking to expand the number of board seats to 12 from the current 10, as it prepares itself to introduce new shareholders. Hota said, “We are increasing the number of board seats for new banks from 10 to 12. Promoter banks will surrender three seats and continue to hold seven seats, so new banks will get five board seats.”
In spite of the changes being done, NPCI will continue to maintain public sector charecteristics as six PSU banks will always remain on the board.