HDFC Bank, Kotak Mahindra Bank to pick up 9.99% stake each in Ferbine

Tata group floats a company for retail payment systems biz

HDFC Bank and Kotak Mahindra Bank (KMB) will pick up 9.99 per cent stake each in Ferbine Private Ltd, a Tata Sons promoted company to operate a PanIndia Umbrella Entity (PUE) for retail payment systems. The last date from applying to Reserve Bank of India (RBI) for license to operate in February 26, 2021.
 

At present National Payments Corporation of India (NPCI) is sole player managing retail payment systems. RBI has thrown open retail payment systems space for more players to support growth of digital payments.
 

KMB in late night filing with BSE said the promoter of Ferbine is Tata Sons Private Ltd. KMB and its subsidiaries in the normal course of business may have business dealings with Ferbine in future at an arm’s length. Ms Farida Khambata, a director of the Bank is also on the board of Tata Sons Ltd.
 

Kotak Mahindra Bank to hold 9.99 per cent shareholding in Ferbine through subscription of 4,995 equity shares of face value of Rs 10 each. HDFC Bank is separate filing said it will also hold 9.99 per cent stake in Ferbine.
 

Ferbine proposes to make an application under the Framework for authorisation of PUE for Retail Payments released by the RBI on August 18, 2020.
 

Ferbine intends to carry on the business of designing and operating retail payment systems and offering related payment, remittance, and technology services, HDFC Bank said in filing.
 

The umbrella entity shall have a minimum paid-up capital of Rs 500 crore. No single Promoter / Promoter Group shall have more than 40 per cent investment in the capital of the umbrella entity.
 

The Promoters / Promoter Groups shall upfront demonstrate capital contribution of not less than 10 per cent (Rs 50 crore) at the time of making an application for setting up of the umbrella entity.
 

The balance capital shall be secured at the time of commencement of business / operations. The Promoter / Promoter Group shareholding can be diluted to a minimum of 25% after 5 years of the commencement of business of the umbrella entity. A minimum net-worth of Rs 300 crore shall be maintained at all times.
 

Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt Ltd