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RBI will divest stakes in DFHI, STCI

The Reserve Bank of India on Thursday said it plans to sell its entire stake in the Discount Finance House of India and the Securities Trading Corporation of India in the current year to March 2002.

Both DFHI and STCI are primary dealers in government bonds, and the RBI currently holds stakes of 10.5 per cent and 14.40 per cent respectively in these institutions.

Major state-owned banks and financial institutions are also shareholders.

In its "Report on the Trend and Progress of Banking in India", the RBI cited the 1998 Narasimham Committee report on banking sector reforms, which had recommended that the central bank should not own institutions it regulates.

The RBI also holds stakes in the State Bank of India, National Housing Bank, Infrastructure Development Finance Company, Deposit Insurance and Credit Guarantee Corporation, National Bank for Agricultural and Rural Development and the Bharatiya Reserve Bank Note Mudran Ltd.

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