Govt to soon acquire Reserve Bank of India's stake in National Housing Bank
The government will soon acquire the stake of Reserve Bank of India in housing finance regulator National Housing Bank (NHB)
New Delhi: The government will soon acquire the stake of Reserve Bank of India in housing finance regulator National Housing Bank (NHB), sources said.
The stake transfer would be cash neutral and there would be no cash outgo, sources said. RBI currently holds 100 percent stake in the NHB.
The Finance Bill 2018 has amended to the National Housing Bank Act, 1987, for transferring RBI's stake in the NHB to the government.
The Finance Bill 2018 was passed by Parliament in the Budget session and following the assent from the president, the finance ministry has started the process of stake transfer, sources added.
In 2012, the Union Cabinet had approved the proposal for transfer of the RBI stake but could not be carried forward due to some reason or other.
It is to be noted that the government has already acquired RBI's stakes in State Bank of India and National Bank of Agriculture and Rural Development (Nabard).
In 2007, the government acquired 59.73 percent stake held by RBI in the country's largest bank SBI for Rs 35,531.33 crore. However, NABARD stake transfer happened in 2010.
It was the Narasimhan Committee that recommended the transfer of RBI's stake in State Bank of India, NABARD and NHB to the government to differentiate the central bank's role as the owner of banks and the sector regulator.
After getting ownership of NHB, the government would also have a greater say in the boards of these institutions and the flexibility to issue directions to meet its credit objectives for the priority sector.
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The amount will be borrowed by the Centre under the Special Window in appropriate tranches and will be passed on to states in back-to back loans, said a finance ministry statement. However, it did not say who will service the interest and principal payments
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