New
Delhi: The government will acquire Reserve Bank's
stake in State Bank of India, National Bank for Agriculture
and Rural Development (Nabard) and National Housing Bank
(NHB) in a cashless transaction to separate ownership
and regulatory functions of Reserve Bank.
After
a cabinet meeting finance minister P Chidambaram told
journalists that following the Narsimhan Committee report,
the union cabinet had approved the proposal to transfer
RBI's stake in SBI, Nabard and NHB to itself in a "cashless
transaction."
The
government will acquire RBI's 59.73-per cent stake, valued
at Rs40,000 crore based on the market price of Rs1,300
of the shares of SBI, the country's largest bank. The
transaction is expected to be completed by June 2007.
The
RBI, being a government institution, will pay back to
the government whatever it gets for the transfer of its
stake in three institutions, hence the be a cashless nature
of the transaction.
The
FM, however, did not specify whether the transaction would
be completed before SBI's proposed IPO to raise funds
from the market this year.
As
NABARD and NHB are not listed entities, the RBI shareholding
will be transferred at an appropriate time, preferably
by June 2008, at book value Chidambaram said.
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