After acquiring the Reserve Bank of India's (RBI) stake in State Bank of India, the government plans to pick up the central bank's stake in apex agriculture bank National Bank of Agriculture and Rural Development (Nabard) and housing finance regulator National Housing Bank (NHB).
There would be cash outgo of Rs 1,900 crore for the acquisition of RBI's stake in both these institutions and the government has sought Parliament's approval for the purchase.
"For making provision for transfer of RBI shareholding in Nabard (Rs 1,450 crore) and NHB (Rs 450 crore) to the government of India at the holding cost of Rs 1,900 crore. This will entail cash outgo," the first supplementary demands for grants tabled in Parliament said today.
At present, the RBI holds a stake of about 72.5 per cent in Nabard and the remaining lies with the government. On the other hand, NHB is wholly-owned by the RBI.
Nabard, with a paid-up capital of Rs 2,000 crore, was set up as an apex development bank with the mandate of facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.
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 role as the owner of banks and the sector regulator.
In 2007, the government acquired the 59.73 per cent stake held by RBI in the country's largest bank, SBI, for Rs 35,531.33 crore.
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Sources said the stake transfer is not likely to affect the functioning of the rural credit delivery system in the country, as the policies will continue to be shaped by the government in consultation with the RBI.
After getting ownership of Nabard and NHB, the government would also have a greater say in the boards of these institutions and the flexibility to issue directions to meet its credit objectives for the priority sector.