LS passes SBI (Amendment) Bill transferring RBI equity to Govt

New Delhi, Aug 20 (UNI) The Lok Sabha today passed the State Bank of India (Amendment) Bill, 2007, with Finance Minister P Chidambaram giving an assurance that the transfer of shareholding of RBI in SBI to the Central government, which the legislation entails, will not interfere with the autonomy of the largest Bank in the country.

Replying to the debate in the House on the Bill, Mr Chidambaram said the entire transaction in this regard has been done in a "completely transparent, efficient and upfront manner." The transfer has been effected as there was inconsistency in the RBI's role as a supervisor and that of the owner.

Mr Chidambaram commended the perfomance of the SBI as also of all other Public Sector Banks, saying that their performance on all fronts has improved in the last fiscal. The improvement becomes even more marked if the performance indicators are taken for the last three years.

The Finance Minister said the enhanced performance in terms of all parametres has been on account of greater autonomy and not by restricting this.

The government will thus ensure that autonomy of the SBI is guarded zealously so that the biggest bank of the country maintains the upswing in terms of performance parametres.

Mr Chidambaram drew a distinction between ownership and management control. He said while the ownership was shifting from the RBI to the Central government, the managerial autonomy vests with the Board of Directors and Chairman and Managing Director.

Mr Chidambaram said the transfer of shareholding involved the entire equity held by the RBI in SBI, that is, 31,43,200 shares comprising 59.73 per cent of its total equity shares. He said in the current year's Budget a sum of Rs 40,000 crores has been provided for this purpose.

The Finance Minister cited figures to justify that banks have been doing well in terms of advances, deposits, NPAs and loans to priority areas such as agriculture, small scale industry, or social sectors.

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