Government of India may buy RBI’s stake in the National Bank of Agriculture and Rural Development (NABARD) in the next fiscal. The Government had allocated Rs. 1450 crore in this budget.
It has been seen that after a discussion with the RBI, Govt. has decided to buy 72.5% of share holding in NABARD. Presently, this is being held by RBI, but after the buyout the bank becomes totally government owned.
Sources say that the share transfer is on and is expected to be get over in the next fiscal.
The Narasimhan committee had suggested the transfer of RBI’s investment in NABARD, SBI and NHB to the Government in order to let RBI’s main function as owner of banks and banking and financial authority gets precedence.
The government obtained 59.73% investment held by RBI in the country’s biggest bank SBI for Rs 35,531.33 crore in 2007.
The stake transfer won’t impact the working of credit delivery system in the country since all policies involving the working of the bank will be determined by the Government in discussion with RBI.
After acquiring ownership control in NABARD, SBI and NHB, the Government will also have a more power in their boards besides the authority to deliver directives to fulfill the credit targets of the priority sector.