Union Cabinet has approved payment of face value of subscribed share capital of Rs.1450 crore in National Housing Bank(NHB) to Reserve Bank of India (RBl). This means that Central government will by ownership shares of RBI in NHB. This will change ownership of NHB from RBI to Central Government.
This is consequent to amendments made to NHB Act, 1987 in 2018 through Finance Bill 2018 in accordance with recommendations of Narasimhan Committee. Prior to this, authorized capital of NHB of was around Rs. 2,000 crore of which Rs. 1,450 crore was subscribed by RBl. Currently, capital is fully subscribed by RBl. Subsequent to payment of this amount to RBl, the subscribed capital of NHB shall stand transferred to and vested in Central Government.
It will strengthen wholesale financing role of NHB with the transfer of ownership to Government and augment funding support to housing finance companies. It will also segregate RBI's role as banking regulator and as owner of NHB.
National Housing Bank (NHB)