The Reserve Bank of India (RBI) has divested its 71.5 per cent stake, aggregating to Rs 1,430 crore, in the National Bank for Agriculture and Rural Development (Nabard) to the government.
Following the divestment, the central bank’s holding in Nabard has come down to one per cent. The Government of India holds 99 per cent. The transaction was done yesterday.
With this, the government will have a greater say in Nabard and flexibility to issue it directions to meet its credit objectives for the priority sector.
At present, RBI has three members on the board. There will not be any change in the mandate of bank after the stake transfer, Nabard Chairman Umesh Sarangi said.
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.
RBI held 72.5 per cent of equity in Nabard aggregating to Rs 1,450 crore. The remaining shareholding, worth Rs 550 crore, was with the government.
The Narasimhan Committee had 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.
