The Reserve Bank of India (RBI) on Wednesday said that it has divested its entire stake in the National Bank For Agriculture and Rural Development and the National Housing Bank amounting to Rs 20 crore and Rs 1,450 crore respectively
Divestment of the RBI's shareholding in NABARD was done in two phases, the central bank said in a statement. After its completion, the government will hold 100 per cent stake in both the financial institutions.
"The bank held 72.5 per cent of equity in NABARD amounting to Rs 1,450 crore out of which 71.5 per cent amounting to Rs 1,430 crore was divested in October 2010 based on the Government of India notification on September 16, 2010. The residual shareholding was divested on February 26, 2019," it said.
Explaining the rationale for the decision, the RBI said that the "divestment of its 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 Financial Institutions and Banks".
"Based on the recommendation, the 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," it said.
The RBI held 100 per cent shareholding in NHB, which was divested on March 19, 2019.
The current change in the capital structure of both the financial institutions was brought in by the Centra government through amendments to the NABARD Act, 1981 and the NHB Act, 1987 which were notified vide gazette notifications dated January 19, 2018, and March 29, 2018, respectively, the RBI added.
--IANS
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