NPCI – Not Government Company

“I write about how the government (Read: NPCI) is turning into a product manager.” ~ LinkedIn.

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NPCI is not government.

1.

NPCI is private, not government. Contrary to what the common man thinks, government and RBI do not own any shares in NPCI. In fact, many foreign banks do. ~ LinkedIn.

2.

NPCI was initiated and regulated by RBI but it is not owned by RBI. See About NPCI. So are many other orgs that are mandated / even administered by government officials but that does not make them government orgs e.g. BSE. ~ LinkedIn.

3.

Fine but still DON’T.

• A2A RTPs like UPI kill float income of banks, so private sector never voluntarily initiates them. Ergo it’s an SOP worldwide for A2A RTPs to be established under government aegis, though not necessarily under government ownership. So in India wrt UPI / NPCI.
• Payment companies all over the world are tightly regulated by their respective governments, still that does not make them government companies.
• Some governments not only regulate rules and workflows of payment schemes but even their prices e.g. EU has a cap on MDR for both credit card and debit card. Reg Dodd Frank Durbin has a cap on debit card MDR in USA. Still Visa, MasterCard, American Express, et al are not government companies.
• As public utilities, TELCOs and Utilities are tightly regulated by government but Airtel, Adani Energy, et al are not government companies.

It’s a government company ONLY when government directly owns at least 51% of equity in it. That is NOT the case with NPCI – although it IS the case with NEFT in India, FedWire in USA, PIX in Brazil, and many other method of payments worldwide.

With that hopefully out of the way, NPCI makes whopping profits, any idea why it’s called a NonProfit? (Sorry but finance is full of nuances). ~ LinkedIn.