Cabinet approves ₹1,450 crore for share capital of RBI in NHB
The Union Cabinet headed by Prime Minister Narendra Modi has approved the Rs1,450 crore for the share capital of Reserve Bank of India in the National Housing Bank (NHB). The authorized capital of NHB stood at Rs 2000 crore of which Rs 1450 crore was subscribed by RBl.
Transfer of Ownership from RBI to Government
- The Finance Bill 2018 amended the National Housing Bank Act, 1987 to transfer RBI’s stake in the NHB to the government.
- The amendment was in accordance with the recommendations of the Narasimhan Committee. The committee had recommended the transfer of RBI’s stake in State Bank of India, NABARD and NHB to the government to differentiate the central bank’s role as the owner of banks and the sector regulator.
- Now the ownership of the NHB would be vested with the central government. This change in ownership will strengthen funding support to housing finance companies.
The transfer of ownership together with segregating RBI’s role as a banking regulator and as the owner of NHB will aid in strengthening the housing finance scenario in the country.
National Housing Bank (NHB)
National Housing Bank (NHB) was established under the act of parliament viz. the National Housing Bank Act, 1987 based on the recommendations of the Rangarajan committee.
NHB was set up as the apex institution for housing finance and operates as a principal agency to promote housing finance institutions both at local and regional levels. NHB provides provide financial and other support to such housing finance institutions.
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Month: Current Affairs - March, 2019