New Delhi: The government will promulgate an ordinance to buy RBI’s 59.7% stake in the country’s largest lender SBI for estimated cost of Rs 40,000 crore.
“The ordinance, relating to amendments to the State Bank of India Act, 1955, would enable the transfer of RBI’s shareholding in SBI to the Central Government,” Information and Broadcasting Minister P R Dasmunsi told reporters after the Cabinet meeting here.
He put estimated cost of the deal at around Rs 40,000 crore.
The deal would not have revenue implications for the government since the RBI is expected to transfer the surplus to the Centre during the first half of August. That way, the Centre would receive what it gives to the Reserve Bank for buying its stake in SBI.
Dasmunsi said a bill will be moved in the coming session of Parliament to replace the ordinance.
Sources said the Finance Ministry has sought Cabinet approval to issue an ordinance to amend the SBI Act, 1955 to ensure that the Centre hands over the cheque to RBI by June 30.
They said the Ministry had to push for an ordinance as a bill to amend the Act is pending with a Parliamentary standing committee.
The Ministry wanted to insert a clause enabling it to buy RBI’s stake when it came back to the House, but in the absence of the standing committee report, it is pushing for an ordinance to close the transaction in time.
Although, the government got Parliamentary approval during the Budget session to enable SBI to reduce its stake in seven associated banks, it could not get approval for takeover of the RBI shareholding in the bank.