RBI unlikely to surrender to governments demand

The Reserve Bank of India (RBI) is unlikely to surrender to government’s demand of transferring funds that was set aside for contingency reserves in 2016-17 and 2017-18, believe experts.

A sum of Rs. 27,330 crore i.e. Rs. 13,140 crore in FY17 and Rs. 14,190 crore in FY18 was kept aside by the RBI for the contingency fund.

There was no precedence of such a dividend being paid, that is, from funds that have already been set aside for contingencies. According to the finance ministry, the government has requested the RBI for providing an interim surplus for the financial year 2018-19, as the central bank in the previous financial year had transferred the amount withheld from the surplus of 2016-17 and 2017-18.

Statutory audit: At the same time, the RBI has now decided to conduct statutory audit of its account twice a year, so that it can transfer the surplus to the government as many times. The government has been demanding more funds as dividend from the RBI which has become a bone of contention. A six-member committee headed by former RBI Governor Bimal Jalan has been formed to review the economic capital framework of the central bank. The committee would submit its report within 90 days from the date of its first meeting.