The government, on Friday, picked up Reserve Bank’s entire 59.7 per cent stake in the country’s largest lender State Bank of India.

“The entire shareholding of Reserve Bank aggregating 31.43 crore shares with face value of Rs 10 each in SBI was transferred to the Central Government on Friday,” SBI informed the Bombay Stock Exchange.

The deal was carried out on the last day of the RBI financial closure. Shares of SBI surged over four per cent to its 52-week high of Rs 1531 up Rs 60.65 as against Thursday’s close of Rs 1470.35 on the BSE. At the end of Friday’s trading the scrip pared some gains to settle at Rs 1525.30 up 3.74 per cent or Rs 54.95. On the NSE, the SBI scrip ended at Rs 1525.80 gaining 3.72 per cent.

Earlier, SBI had informed the bourses that the Centre would pick up 31.43 crore equity shares on June 29 for a cash payment of Rs 35,531.33 crore. The Government had promulgated SBI Amendment Ordinance 2007 on June 21 to amend State Bank of India Act 1955 for buying RBI’s entire shareholding in the bank. The move to buy RBI’s stake is aimed at enabling the central bank to concentrate on its core function of banking regulator.

Goverment equity
In Mumbai, SBI Chairman O P Bhatt had earlier said that government equity would be brought down to 51 per cent once necessary transfers of RBI’s share in SBI to the government are completed. The deal will not have revenue implications for the government since RBI is expected to transfer the surplus to the Centre during the first half of August.

RBI’s proposal for transferring its entire shareholding in SBI to the government was approved by the Cabinet in its meeting held on February 1.