Reserve Bank of India divests its share in NABARD and NHB

Government now holds 100% stake in both the financial institutions

The RBI divested its entire stake in NABARD and NHB amounting to 20 crore and 1450 crore on 26 February 2019 and 19 March 2019 respectively. With this, the Government of India now holds 100% stake in both the financial institutions.

Divestment of RBI's stake in NABARD and NHB has its basis in the recommendation of Narasimham Committee II and the Discussion Paper prepared by RBI on Harmonizing the Role and Operations of Development Financials Institutions and Banks. Based on the recommendation, RBI announced the proposal to transfer ownership of its shares in SBI, NHB and NABARD to the Central Government in the Monetary and Credit Policy for the year 2001-02.

 

Divestment of RBI's shareholding in NABARD was done in two phases. The Bank held 72.5% of equity in NABARD amounting to 1450 crore out of which 71.5% amounting to 1430 crore was divested in October 2010 based on the Government of India notification on 16 September 2010. The residual shareholding was divested on 26 February 2019.

RBI held 100% shareholding in NHB, which was divested on 19 March 2019. The current change in the capital structure of both the financial institutions was brought in by the Government of India through amendments to the NABARD Act, 1981 and the NHB Act, 1987 which were notified vide gazette notifications dated 19 January 2018 and 29 March 2018 respectively.

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