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Our Bureau

New Delhi, Aug 20 The Lok Sabha on Monday passed a Bill to replace the Ordinance promulgated on June 21 to facilitate the Centre’s buyout of the Reserve Bank of India’s shareholding in SBI.

On June 29, the Centre acquired 59.73 per cent stake of RBI against total payment of Rs 35,531.33 crore drawn from the Consolidated Fund of India.

Replying to the discussion on the State Bank of India (amendment) Bill 2007, the Finance Minister, Mr P. Chidambaram, asserted that the Centre’s move to buy the entire stake would not in any manner curtail the autonomy of SBI. “SBI today is a stronger bank than what it was three years ago. We will make every effort to make it a much stronger bank. If the Government had interfered with the autonomy of banks, would they have become better and stronger as they have in the last three years? We have given more autonomy and not restricted them.”

He also said that the Centre’s buyout of RBI’s entire stake in SBI was done “quite transparently” and that the apprehensions voiced by the members had no basis.

A number of MPs said that the Government need not have used the Ordinance route to facilitate this transaction and contended that this was an unhealthy practice.

The Finance Minister, however, pointed out that the Government’s intent to acquire RBI shareholding in SBI was announced in the Budget for 2007-08.

On queries from MPs as to why the Government was not buying out RBI’s stake in Nabard and National Housing Bank through the same Ordinance, Mr Chidambaram said that the Centre was not showing any urgency as both were unlisted entities.

However, he assured that the transactions in respect of both the institutions would be completed by June 2008.

More Stories on : Financial Policy | State Bank of India | Public Sector Banks

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