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RBI divests its stakes in NABARD and NHB

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The Reserve Bank of India (RBI) divested its entire stake in National Bank for Agriculture and Rural Development (NABARD) and National Housing  Bank (NHB), amounting to Rs. 20 crore and Rs. 1450 crore, on February 26, 2019, and March 19, 2019, respectively.
 
With this, the Government of India now holds 100% stake in both the financial institutions, a press release from the central bank said here on Wednesday.
 
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 Financial Institutions and Banks, the release said.
 
Based on the recommendation, RBI announced the proposal to transfer ownership of its shares in State Bank of India (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 per cent of equity in NABARD amounting to Rs. 1450 crore out of which 71.5 per cent amounting to Rs. 1430 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.
 
RBI held 100% 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 Government of India 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 release added.
 
NNN
 

(Our News Desk can be contacted at desk@netindian.in)

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