Narayana Murthy to join NPCI board as non-executive Chairman

Indian Banks Association (IBA), which is functioning as a facilitator to set up the new entity, is understood to have approached the Infosys founder to take over the new responsibility, a source close to the development said.

"IBA has approached Narayana Murthy to join the (NPCI) board. He has agreed to join the board," the source said.

Though, Narayana Murthy will not be directly involved in the operations of the company, he will guide the board on crucial operations, the source said.

Another former Infosys top executive, Nandan Nilekani had recently joined the government to head the Unique Identity Card project of the UPA government.

NPCI, which was first mentioned in the 2005-08 vision document of the central bank, is being set up to segregate all retail payment activities.

This, however, excludes, real time gross settlement (electronic) transactions, which will continue to be handled directly by the apex bank.

The Reserve Bank, which is currently burdened with the responsibility of all types of payments, plans to hand over most of the retail operations to the NPCI in the next one year.

NPCI will be majority owned by public sector banks which, together will have 51 per cent stake in the company, while the rest of the holding will be with private and foreign sector lenders.

State-owned lenders, who will own majority stake in NPCI are State Bank of India, Punjab National Bank, Union Bank, Canara Bank and Bank of Baroda. ICICI Bank, HDFC Bank, Citi and HSBC will be the other stake holders.

Former RBI CGM in charge of payment and settlement A P Hota is the interim NPCI CEO.

Hota will lead the operations of the new entity in the initial phase of operations, including the recruitment of a permanent CEO.

KPMG has been appointed as a consultant to search for suitable candidates to run NPCI.

Parliament cleared the Payment and Settlements Act, 2007, giving more power to the central bank in matters related to payment and settlement more effectively by introducing uniformity and standardisation in retail transactions.