The Centre has notified taking over National Housing Bank (NHB) from the Reserve Bank of India (RBI) after buying the complete stake of Rs 1,450 crore.
Last week, the RBI had exited NHB and NABARD making both the entities a fully government-owned entity. The central bank was acquiring 100 percent stake in the NHB, the housing finance regulator.
The move is initiated in adherence to the recommendation of Narasimham-II committee report of October 2001 and the RBI’s own discussion paper on the same, titled ‘Harmonising the Role and Operations of Development Financial Institutions and Banks’.
“The central government hereby notifies that the subscribed capital of Rs 1,450 crore of the NHB by the RBI stands transferred to and vested in the central government upon payment of the face value of the subscribed capital, to the RBI, with effect from the 19th day of March, 2019,” said the Union Minister of Finance dated April 29.
The Narasimham panel had mentioned in its report that the RBI could not own those entities which are regulated by it.
Earlier, the Central Bank owned 72.5 per cent equity in NABARD worth Rs 1, 450 crore, of which 71.5 percent amounting to Rs 1,430 crore were divested in October 2010 and the residual shareholding was later divested on February 26, 2019.
In October 2001, following the recommendations of the second Narasimham committee, the RBI had proposed to transfer its ownership in State Bank of India, NHB and NABARD to the government.