16 january 2007

government to buy rbi stake in sbi on june 30
mumbai: the government is planning to buy the reserve bank of india's stake in the state bank of india on the 30th of june, so as to keep the interest payments to the minimum.

the acquisition will also need a revision to the sbi amendment bill that is currently before the parliament.

going by the formula, the payment for the 31 crore shares is expected to be well over rs42,000 crore. though the transaction will be completed well within government's financial year, it will need some smart cash management.

the purchase will also need a revision in the sbi amendment bill, currently before the parliament to seek legislative approval for rbi to drop its stake below 55 per cent to 51 per cent.

finance ministry sources say they will have to substitute the term government for reserve bank, as rbi would have divested its entire stake to a conflict of interest as a banking regulator.

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