Govt may acquire RBI`s stake in Nabard, NHB by Dec
  • This Section
  • Latest
  • Web Wrap
Last Updated: Sunday, August 02, 2009, 11:45
  
New Delhi: The government is likely to pick up Reserve Bank's stake in the National Bank of Agriculture and Rural Development and National Housing Bank by December this year.

The stake transfer from RBI to the government would take place by December 31, official sources said.

In Budget 2009-10, the government earmarked Rs 1,542 crore for acquiring Reserve Bank's holding in the two regulators Nabard and NHB.

For Nabard's stake buy, the Centre made a provision of Rs 1,100 crore and for that of NHB Rs 442 crore was assigned.

At present, the RBI holds about 72.5 percent stake in Nabard and the remaining lies with the government. While, NHB is wholly-owned by the Reserve Bank.

The total paid-up capital of Nabard currently stands at Rs 2,000 crore, NHB was capitalised at Rs 350 crore when it was set up in 1988.

It was the Narasimhan Committee that recommended the transfer of RBI's stake in State Bank of India, Nabard and NHB to the government to differentiate the central bank's functioning as the owner of banks and the sector regulator.

In 2007, the government acquired 59.73 percent stake held by RBI in the country's largest bank SBI for Rs 35,531.33 crore.

Sources said the stake transfer is not likely to affect the functioning of rural credit delivery system in the country as the policies in this regard will continue to be shaped by the government in consultation with RBI.

After getting ownership of SBI, NABARD and NHB, the government will also have greater say in the boards of these institutions, besides flexibility to issue directions to meet its credit objectives for the priority sector.

Bureau Report


First Published: Sunday, August 02, 2009, 11:45


comments powered by Disqus