labels: national housing bank, rbi, sbi, nabard, banks & institutions
Government to acquire SBI, Nabard, NHB from RBI news
02 February 2007

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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Government to acquire SBI, Nabard, NHB from RBI