Cabinet nod for transfer of RBI's stake in SBI, NABARD, NHB to govt

New Delhi, Feb 1 (UNI) The Union Cabinet today approved the transfer of shareholding of RBI in SBI, NABARD and NHB to the government to enable the Central Bank to focus on regulatory and supervisory functions.

The Cabinet put its seal of approval for the transfer of shareholding of Reserve Bank of India (RBI) in State Bank of India (SBI) to the government in June 2007 against a cash payment of the valuation amount to be determined on market price in accordance with the SEBI guidelines.

It also approved transfer of ownership of shareholding of RBI in National Bank for Agricultural and Rural Development (NABARD) and National Housing Bank (NHB) to the government at book value.

Briefing newspersons on the outcome of the Cabinet and Cabinet Committee of Economic Affairs (CCEA) decisions, Information and Broadcasting Minister P R Dasmunsi and Finance Minister P Chidambaram said the move will enable eliminating the conflict of interest in discharge of RBI's duties as banking regulator and also having ownership in banks and financial institutions.

They said as SBI is a listed entity and its stocks are widely traded, the shareholding of RBI in SBI may be transferred by June 2007.

Mr Chidambaram said the exact value will be worked out while effecting the actual transfer. The actual acquitision cost of the stock for the stake transfer is likely to be around Rs 40,000 crore.

This calculation is made assuring the reference price as per SEBI formula of SBI share to be around Rs 1,300 crore.

As NABARD and NHB are not listed entities, RBI shareholding in these companies may be transferred at an appropriate time, preferably by June 2008 at book value, Mr Chidambaram said.

UNI