Govt to buy RBI's stake in NHB, Nabard by June 2008: FM
The Reserve Bank owns 72.50% in Nabard and 100% in National Housing Bank. The government has already bought RBI's 59.73% stake in State Bank of India.
By PTI |
NEW DELHI: The government plans to buy Reserve Bank's stake in National Housing Bank and Nabard by June next year so as to ensure the central bank does not own the institutions it regulates.
"We plan to buy RBI's stake in NHB and Nabard by June 2008. Since these two are unlisted entities, there is no great urgency," Finance Minister P Chidambaram said here.
This would ensure that RBI does not own the institutions it regulates, he said in Lok Sabha.
The Reserve Bank owns 72.50 per cent in Nabard and 100 per cent in NHB. The Union Government has already bought RBI's 59.73 per cent stake in State Bank of India. The house later passed a bill to replace the Ordinance enabling transfer of RBI's shares in SBI to the central government.
The Centre had promulgated the ordinance in June this year to buy RBI's stake in SBI and the SBI (Amendment) Bill, 2007 replaces this ordinance, Chidambaram said here.
He assured the house that the transaction would not affect the bank's functioning and it would continue to work in an autonomous manner.
Dismissing some members' views that the government did not follow the due procedure in bringing an ordinance to withdraw a large sum of money from the exchequer, Chidambaram said the he had mentioned the decision in his budget speech and provided Rs 40,000 crore for this transaction.
The actual transaction amounted to Rs 35,531 crore, he said, adding the Reserve Bank has since returned this amount to the central amount as its surplus.
The move followed the report of Narasimham Committee on Banking Reforms that a regulator should not be an owner of the bank.
"We plan to buy RBI's stake in NHB and Nabard by June 2008. Since these two are unlisted entities, there is no great urgency," Finance Minister P Chidambaram said here.
This would ensure that RBI does not own the institutions it regulates, he said in Lok Sabha.
The Reserve Bank owns 72.50 per cent in Nabard and 100 per cent in NHB. The Union Government has already bought RBI's 59.73 per cent stake in State Bank of India. The house later passed a bill to replace the Ordinance enabling transfer of RBI's shares in SBI to the central government.
The Centre had promulgated the ordinance in June this year to buy RBI's stake in SBI and the SBI (Amendment) Bill, 2007 replaces this ordinance, Chidambaram said here.
He assured the house that the transaction would not affect the bank's functioning and it would continue to work in an autonomous manner.
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Dismissing some members' views that the government did not follow the due procedure in bringing an ordinance to withdraw a large sum of money from the exchequer, Chidambaram said the he had mentioned the decision in his budget speech and provided Rs 40,000 crore for this transaction.
The actual transaction amounted to Rs 35,531 crore, he said, adding the Reserve Bank has since returned this amount to the central amount as its surplus.
The move followed the report of Narasimham Committee on Banking Reforms that a regulator should not be an owner of the bank.
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