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Ambarish Mukherjee

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New Delhi Jan. 31 The Cabinet Committee on Economic Affairs (CCEA) will take up the proposal for transferring of the Reserve Bank of India's share in State Bank of India (SBI), National Bank for Agricultural and rural Development (Nabard) and National Housing Bank (NHB) from RBI to the Central Government.

The RBI holds 59.73 per cent stake in SBI, 72.50 per cent stake in Nabard and 100 per cent stake in NHB.

Narasimham panel

The move follows an earlier recommendation made by the Narasimham Committee on Financial Sector Reforms, which suggested that the RBI should not own institutions that it regulates.

The Government's cost for acquiring the 59.73 per cent stake in SBI, which is a listed bank, from the RBI has been estimated to be Rs 40,000 crore, sources said.

The money to be given to the RBI by the Central Government on this account would be through adjustments in annual transfer of surplus, sources said.

Transfer by June

The transfer of SBI shares from RBI to the Government would be completed by June 2007 while for Nabard and NHB, the plan is to complete the transfer process by June 2008.

In case of Nabard and NHB, since they are unlisted companies, the transfers would take place at book value only, sources pointed out.

More Stories on : Public Sector Banks | Mergers & Acquisitions | RBI & Other Central Banks | State Bank of India

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