Govt to acquire RBI's stake in Nabard, NHB by year-end

Govt to acquire RBI's stake in Nabard, NHB by year-end

The stake transfer from RBI to the government would take place by December 31 2009, official sources said.

In Budget 2009-10, the government earmarked Rs 1,542 crore for acquiring Reserve Bank’s holding in the two regulators Nabard and NHB.

For Nabard’s stake buy, the Centre made a provision of Rs 1,100 crore and for that of NHB Rs 442 crore was assigned.

At present, the RBI holds about 72.5 per cent stake in Nabard and the remaining lies with the government. While, NHB is wholly-owned by the Reserve Bank.

The total paid-up capital of Nabard currently stands at Rs 2,000 crore, NHB was capitalised at Rs 350 crore when it was set up in 1988.

Sources said the stake transfer is not likely to affect the functioning of rural credit delivery system in the country as the policies in this regard will continue to be shaped by the government in consultation with RBI.

After getting ownership of SBI, NABARD and NHB, the government will also have greater say in the boards of these institutions, besides flexibility to issue directions to meet its credit objectives for the priority sector.

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