RBI raises shareholding in NHB by pumping in Rs 1,000 cr

Reserve Bank has increased its shareholding in National Housing Bank by contributing Rs 1,000 crore towards the paid capital.
"The Reserve Bank has contributed Rs 1,000 crore towards the paid up capital of the National Housing Bank on January 12, 2016, thereby increasing its shareholding in the NHB from Rs 450 crore to Rs 1,450 crore," RBI said in a release today.
The move is aimed at facilitating NHB to expand financial operations given the demand for housing in the country.
RBI had provided for an amount of Rs 1,000 crore during the accounting year 2014-15, specifically towards capital contribution to the NHB, which is its wholly owned subsidiary, it added.

"This would help NHB to expand its financial operations as envisaged under the NHB Act, 1987," RBI said further.
Finance Ministry in December had notified an increase in authorised capital of NHB from Rs 450 crore to Rs 1,450 crore to enable RBI to augment its shareholding in NHB.

Set up in 1988, NHB is an apex level institution for housing, keeping in view the non-availability of long-term finance to individual households as a major lacuna impeding progress of housing sector in the country.
Several structured remittances in the range of USD 80,000
-99,900 have been made by the same account holder very frequently from select authorised dealer branches, the central bank said.

It added: "In many banks neither the concurrent auditors nor the internal auditors could find out irregularities in such a large scale, raising questions about the scope, coverage and capability of the internal control mechanisms.
"What was more disquieting was the fact that the abnormal spurt in import transactions in these branches vis-a-vis the performance in previous periods has not caught the attention of the controlling or head office of the bank."
Considering the "scale and spread of such transactions", banks were advised to immediately initiate a detailed internal audit of Authorised Dealers branches where such remittances have gone up significantly during the past two to three years.

"The scope of audit also may cover the current accounts with huge number of inward or outward Real-time gross settlement (RTGS) and National Electronic Funds Transfer (NEFT) transactions, not in sync with the declared turnover or business, KYC processes followed etc," it said.
In reply to the RTI application, RBI has said that it is in the process of receiving the internal audit report from various banks.