The stage has been set for RBI to offload equity in housing bank regulator national Housing Bank (NHB) to the government.
“This was in the works for a long time. There was a concern for a long time about RBI being the regulator and the owner,” said R V Verma, chairman and managing director, National Housing Bank.
The Cabinet Committee on Economic Affairs on Wednesday cleared a proposal to this effect.
Verma told Business Standard that NHB will continue to be the supervisory body to the housing finance companies in close coordination with RBI. He said, “NHB will focus on financing, development and promotion for the housing finance companies, making our role more broad-based.”
There has been a debate whether RBI should focus on its regulatory role or should it also be an owner of lending institutions. The two roles often come in conflict.
In 2007, RBI sold its 59.73 per cent stake in State Bank of India to the government for Rs 35,531 crore.
Since then, the government has also passed a Bill in Parliament to enable it to cut stake in SBI to 51 per cent from earlier stipulated 55 per cent.
In 2010, RBI divested 71.5 per cent equity in National Bank for Agriculture and Rural Development (Nabard), worth Rs 1,430 crore. The central bank now retains only 1 per cent stake in the apex bank for agriculture credit and rural development.
At present, the NHB is wholly-owned by the RBI with a paid-up capital of Rs 450 crore.
