English Release 18-May 2013
- Min of Labour & Employment
- 45th Session of the Indian Labour Conference Concludes with A Resolve to Provide Universal Social Security Coverage and Assured Pension to the Entire Working Population
Ministry of Finance29-June, 2007 16:55 IST
|Government acquires entire RBI shareholding in SBI|
|In its biggest ever cash purchase, Government today acquired entire Reserve Bank of India (RBI) shareholding in State Bank of India (SBI) consisting of 31,43,39,200 equity shares with face value of Rs. 10/- each @ Rs. 1130.35 per share at a total amount of Rs. 35,531,33,14,720 (Rupees Thirty five thousand five hundred thirty one crore, thirty three lakhs, fourteen thousand seven hundred twenty). Though, SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, known as Takeover Regulations, per se were not applicable in this transaction, for sake of greater transparency, the valuation of RBI stake in SBI was worked out as per SEBI guidelines taking 28th February, 2007, as the “reference date”, the day on which the decision of the Government to acquire RBI stake in SBI was announced by Finance Minister in his Budget Speech and the intention of the Government to acquire SBI was made public. Government has also decided to acquire RBI shareholding in NABARD and NHB by June, 2008.
The Committee on Banking Sector Reforms (Narasimham Committee II), inter-alia, observed that it is inconsistent with the principles of effective supervision that the regulator is also an owner of a bank and this would require the Reserve Bank of India (RBI) to divest its holding in banks and financial institutions. In its Monetary and Credit Policy for the year 2001-02, RBI announced its intention to transfer the ownership of shares in State Bank of India (SBI), National Housing Bank (NHB) and National Bank for Agriculture and Rural Development (NABARD) in favour of the Government of India. Accordingly, RBI sent a proposal to transfer its shares in these entities to the Government of India. RBI holds 59.73% stake in SBI, 72.50% in NABARD and 100% in NHB.
Finance Minister, in his Budget Speech for the year 2007-08, announced the proposal of the Government to acquire entire stake of RBI in SBI, and provided a sum of Rs. 40,000 crore for transfer of RBI shareholding in SBI to the Government of India. An Ordinance was promulgated to provide requisite statutory provisions in State Bank of India Act, 1955 to facilitate this transaction, and Government appointed 29th June, 2007 the date for transfer of stake.
(Release ID :28897)