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Cabinet approves Rs 1450 cr for share capital of RBI in NHB
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Cabinet approves Rs 1450 cr for share capital of RBI in NHB

Agency News

New Delhi, Feb 28 : The Cabinet on Thursday approved payment of the face value of the subscribed share capital of Rs 1450 crore in National Housing Bank (NHB) to Reserve Bank of India (RBl) consequent to amendments made to the NHB Act, 1987 in 2018.

The NHB is an apex agency established to operate as the principal agency to promote housing finance institutions in India. The wholesale financing role of NHB will get strengthened with the transfer of ownership to government, thereby making possible augmented funding support to housing finance companies, Union Finance Minister Arun Jaitley told reporters here. The change in ownership from RBI to the Government will also segregate RBI's role as banking regulator and as owner of NHB. Mr Jaitley said the expenditure of Rs 1,450 crore is to be met out of Gross Budgetary Support 2018-19. The beneficiaries are the Reserve Bank of India and the Housing Sector.

NHB is an All India Financial Institution(AIFl), set up in 1988, under an Act of Parliament, viz. the National Housing Bank Act, 1987. It is an apex agency established to operate as a principal agency to promote housing finance institutions both at local and regional levels and to provide financial and other support incidental to such institutions and for matters connected therewith. Up till now, the authorized capital of NHB stands at Rs. 2,000 crore of which Rs. 1,450 crore has been subscribed by RBl.

Currently, the capital is fully subscribed by RBl. Subsequent to the payment of this amount to RBl, the subscribed capital of NHB shall stand transferred to and vested in the Central Government. (UNI)