RBI divests 71.5 per cent Nabard stake to government
15 Oct 2010
With the Reserve Bank of India (RBI) divesting its 71.5-per cent stake, aggregating to Rs1,430 crore, in the National Bank for Agriculture and Rural Development (Nabard) to the government, the government of India's holding in the bank has gone up to 99 per cent.
The apex bank's holding in Nabard has fallen to 1 per cent, with the development. The transaction was completed yesterday.
Following this, the government would now have a greater say in Nabard and as also the authority to issue it directions to meet its credit objectives for the priority sector.
Currently, RBI has three members on the bank's board and the bank's mandate would remain unaffected after the stake transfer according to Nabard chairman Umesh Sarangi.
Nabard has a paid-up capital of Rs2,000 crore and was established as an apex development bank with the mandate of facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.
The RBI held 72.5 per cent equity in Nabard aggregating to Rs 1,450 crore while the balance shareholding, worth Rs550 crore, was held by the government.
The Narasimhan Committee had recommended that RBI's the stake in State Bank of India, Nabard and NHB be transferred to the government to differentiate the central bank's role as the owner of banks and the sector regulator.
According to the recommendation, the government acquired the 59.73 per cent stake held by RBI in the country's largest bank, SBI, for Rs35,531.33 crore in 2007.
The apex bank's holding in Nabard has fallen to 1 per cent, with the development. The transaction was completed yesterday.
Following this, the government would now have a greater say in Nabard and as also the authority to issue it directions to meet its credit objectives for the priority sector.
Currently, RBI has three members on the bank's board and the bank's mandate would remain unaffected after the stake transfer according to Nabard chairman Umesh Sarangi.
Nabard has a paid-up capital of Rs2,000 crore and was established as an apex development bank with the mandate of facilitating credit flow for promotion and development of agriculture, small-scale industries, cottage and village industries, handicrafts and other rural crafts.
The RBI held 72.5 per cent equity in Nabard aggregating to Rs 1,450 crore while the balance shareholding, worth Rs550 crore, was held by the government.
The Narasimhan Committee had recommended that RBI's the stake in State Bank of India, Nabard and NHB be transferred to the government to differentiate the central bank's role as the owner of banks and the sector regulator.
According to the recommendation, the government acquired the 59.73 per cent stake held by RBI in the country's largest bank, SBI, for Rs35,531.33 crore in 2007.