ONDC Bank Of India Acquires Stake On Indian Stock Price Website Listing Application MSME

Bank of India on Tuesday acquired a 5.56% stake, for Rs 10 crore, in Open Network Digital Commerce (ONDC). India’s main weapon to combat the monopolistic practices of e-commerce giants such as Amazon and Flipkart, ONDC is a government initiative aimed at enabling open networks in digital or e-commerce, with the aim of democratizing the sector by allowing local merchants to sell their products and services. without having to worry about unfair business practices from big companies. In this article, we will take a detailed look at ONDC and the benefits it offers.

ONDC: Whose initiative is it? When was it incorporated?

The ONDC is an initiative of the Ministry of Trade and Industry, or more precisely of its subsidiary, the Directorate for the Promotion of Industry and Internal Trade (DPIIT). The ONDC was incorporated in December 2021.

ONDC: What advantages does it offer traders?

As the Minister of State in the Ministry of Trade and Industry, Som Prakash, explained in a written response to the Lok Sabha in April 2022, the ONDC aims to promote “open networks for all aspects of the ‘exchange of goods and services over digital or electronic networks’. So what does this mean?

Put simply, ONDC will help e-commerce move from a platform-centric network to an open network. This way, local merchants will be able to make their products and services digitally visible and transact through an open network, and not be buried by big-budget promotions from giants like Amazon or Flipkart.

ONDC will allow listings from all segments including groceries, hotel booking, food delivery, etc.

According to Prakash, ONDC will function as the unified payment interface (UPI) or even the hypertext transfer protocol (http) for online exchanges. At its core, the platform will be open to everyone and simple to use.

“ONDC goes beyond the current platform-centric model of digital commerce, where both buyer and seller must use the same platform or application to be digitally visible and complete a business transaction,” explained Prakash.

The ONDC will comply with the Information Technology Act 2000 and has also been designed to comply with the Personal Data Protection Bill, which was first introduced in Parliament in December 2019.

ONDC’s protocols will help standardize a variety of operations – from cataloging and inventory management to order management and order fulfillment.

“Small businesses could use any ONDC-compliant app instead of being governed by specific platform-centric policies,” Prakash said. “This will provide multiple options for small businesses to be discoverable on the network and do business. It would also encourage easy adoption of digital means by those who are not currently on digital commerce networks.

In terms of data, ONDC will not require any participant to share transaction-level data with the platform itself. There will be no compromise on confidentiality and privacy.

ONDC is currently in its pilot phase. A nine-member advisory board – including Nandan Nikelani of Infosys and Vedanta chairman Anil Agarwal – is working on ONDC adoption.

ONDC: Will customers see a benefit?

Thanks to ONDC, e-commerce could become more accessible and inclusive for regular customers, as they will have the ability to discover any seller, product or service using any compatible application – and not just depend on a handful of platforms to do so. .

For example, customers could choose to buy from their nearest available supply, or even have the freedom to choose the local business they prefer.

ONDC: Who are the main stakeholders to date?

As mentioned, Bank of India acquired a 5.56% stake for Rs 10 crores, which in absolute terms is equivalent to 1 million shares for Rs 100 each.

Apart from the state-run lender, other banks have also bought stakes including Axis Bank, Kotak Mahindra Bank and State Bank of India, each of which acquired a 7.84% stake in ONDC for Rs 10 crores. Additionally, BSE Investments Limited also acquired a 5.88% stake.

Additionally, Microsoft has also joined ONDC, seeking to introduce social e-commerce through an app in India. The Redmond-based tech giant plans to leverage the ONDC network to launch a shopping app, which will help customers browse listings from a wide variety of merchants and discover the best prices.

About Jean R. Manzer

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