Amid the debate over whether the Reserve Bank of India (RBI) should hold stake in lending institutions or only be a regulator, the central bank has sold almost all its holding in the apex agriculture and rural development bank, Nabard, to the government of India.
"The RBI divested its stake amounting to Rs 1,430 crore in National Bank for Agriculture and Rural Development (Nabard) on October 13, 2010. With this, the Reserve Bank's holding in Nabard has come down to 1 per cent of shareholding in Nabard. The government of India now holds 99 per cent of the stake," the central bank said in a statement.
The move comes more than three years after the RBI sold its entire stake in the country's largest lender State Bank of India to the government.
The Reserve Bank held 72.5 per cent of equity in Nabard amounting to Rs 1,450 crore. The remaining shareholding worth Rs 550 crore was with the government of India.
The Union Cabinet in May 2008 had approved RBI's proposal to transfer its share holding in Nabard to the government.
Now, the only major institution where RBI holds a stake is National Housing Bank (NHB). The central bank hold 100 per cent stake in the housing finance regulator.
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