The decision is taken to end the cross-holding in the regulatory institutions
... and it follows Narasimham-II committee report’s recommendation and discussion paper by RBI.
A finance ministry notification dated April 29 stated that subscribed capital to the tune of Rs 1,450 of NHB has now been transferred to the government on payment of the face value of the subscribed capital to the central bank with effect from March 19, 2019. The central bank can’t hold ownership stakes in the entities that are regulated by it, Narasimham panel had said.
In October 2010, RBI has sold its stake in National Bank for Agriculture and Rural Development (NABARD) as well. The entity is a development financial institution in India, headquartered at Mumbai with regional offices all over India. The central bank divested 71.5 per cent of 72.5 percent equity amounting to Rs 1,430 in it.The remaining shareholding was divested on February 26, this year.
Meanwhile, a few days back, the Supreme Court came down heavily on RBI for not releasing information on bank inspection reports. The apex court had also hit the central bank hard for not making public the names of loan defaulters.