The government on Thursday cleared the long-awaited sale of the UTI Asset Management Company to three state-owned banks and the LIC [Get Quote] at a price of Rs 1,237 crore (Rs 12.37 billion), but made it clear that stakes of the company could not be sold without its approval.

"The government will have a final say on transfer of equity of UTI AMC," Finance Minister P Chidambaram told reporters after a meeting of the Cabinet Committee on Economic Affairs.

State Bank of India [Get Quote], Punjab National Bank [Get Quote], Bank of Baroda [Get Quote] and the LIC, which have been selected by the government as sponsors of the UTI AMC would not be able to transfer the equities of the company without the prior sanction of the government, Chidambaram said.

"The sponsors will not transfer their share in future either amongst themselves or to any outsider without prior concurrence of the government," Chidambaram said.

The minister said though the transfer had to be effective from October 1, the proposal has been cleared only on Thursday.

While admitting there had been some delay in finalising the proposal as the legal transfer agreement was signed as early as January 15, 2003, Chidambaram said this was due to time taken for acceptance of the two valuers' report on the UTI-AMC.

On the winding up of UTI-I, which was handling all the assured return scheme including the flagship US-64 scheme, Chidambaram said it will be wound up after liquidation of assets, which were enough to meet the liability.

The three banks and the LIC were selected by the government as sponsor of UTI MF and they formed the UTI Asset Management Company by contributing Rs 2.5 crore (Rs 25 million) each as capital totalling Rs 10 crore (Rs 100 million).