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RBI exits NHB, NABARD

The Reserve Bank of India has sold its entire stakes in the National Housing Bank (NHB) and the National Bank for Agriculture & Rural Development (NABARD) to the government for Rs 1450 crore and Rs 20 crore, respectively. The 2 entities now become fully government-owned. The stake sale is part of ending the cross-holding in regulatory institutions and follows the recommendation of second Narasimham committee report of October 2001 and the RBI’s own discussion paper on the same entitled ‘Harmonizing the role and operations of development financial institutions and banks.’ The Narasimham panel had said RBI could not own those entities which are regulated by it. RBI’s holding in NABABRD was divested in 2 phases – 71.5% of the stake worth Rs 1430 crore was divested in October 2010 and the balance on 26 February 2019. The RBI held 100 percent shareholding in NHB, which was divested on 19 March 2019. The RBI had also exited State Bank of India, where it had held 59.7% holding.

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