Government plans ordinance to take

Mumbai: The government will promulgate an ordinance to acquire the Reserve Bank's 59.7-per cent stake in the country's largest lender, the State Bank of India (SBI) for an estimated Rs40,000 crore.

The deal, however, would not have revenue implications for the government since the RBI is expected to transfer the surplus to the central government during the first half of August. That way, the government would receive what it gives to the Reserve Bank for buying its stake in SBI.

"The ordinance, relating to amendments to the State Bank of India Act, 1955, would enable the transfer of RBI's shareholding in SBI to the central government," information and broadcasting minister P R Dasmunsi told reporters after the cabinet meeting here.

Dasmunsi said a bill to replace the ordinance will be moved in the coming session of parliament.

The finance ministry has sought cabinet approval to issue an ordinance to amend the SBI Act, 1955 to ensure that the government hands over the cheque to RBI by 30 June, sources said, adding that the ministry had to push for an ordinance as a bill to amend the Act is pending with a parliamentary standing committee.

The ministry wanted to insert a clause enabling it to buy RBI's stake when it came back to the house, but in the absence of the standing committee report, it is pushing for an ordinance to close the transaction in time.

Although, the government got parliament's approval during the budget session to enable SBI to reduce its stake in seven associated banks, it could not get approval for takeover of the RBI shareholding in the bank.