The Hindu Business Line : Centre's buy of RBI stake in SBI as per pricing formula

New Delhi June 16 The Centre's buyout of the Reserve Bank of India's entire holding in State Bank of India (SBI) would be done as per SEBI specified pricing formula.

The price is likely to be the 26-week average of the quoted price of SBI calculated from a day prior to the date of transfer. "The pricing will be as per the SEBI formula,'' official sources said.

The Government has in Budget 2007-08 provided a sum of about Rs 40,000 crore for acquiring the RBI's equity holding in SBI. The Finance Minister, Mr P. Chidambaram, said in his Budget speech that the transaction would be deficit neutral to the Government.

Ordinance

The Union Cabinet on Friday approved the promulgation of an ordinance to enable the transfer of shareholding by bringing an amendment to the State Bank of India Act. The sources said that the ordinance, which is likely to be issued before June 30, would merely replace the phrase "Reserve Bank of India'' with "Central Government'' in certain provision in the State Bank of India Act.

There would be an outgo of funds from the Central Government to the RBI before June 30, when the central bank closes its books. The RBI's accounting year is from July 1 to June 30. These funds are likely to come back to the Central Government sometime in August as part of transfer of surplus from the RBI to Centre, the sources said.

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Centre's buy of RBI stake in SBI as per pricing formula