RBI board decides to transfer interim surplus of Rs 28,000 crore to government

he central board of the Reserve Bank of India (RBI) on Monday decided to transfer interim surplus of Rs 28,000 crore to the government.

“The board reviewed the current economic situation, global and domestic challenges and other specific areas of operations of the Reserve Bank. Based on a limited audit review and after applying the extant economic capital framework, the Board decided to transfer an interim surplus of Rs 280 billion to the central government for the half-year ended December 31, 2018,” the RBI press release said.

The total surplus transfer by the central bank now stood at Rs 68,000 crore in 2018-19.

Last financial year, the RBI had paid an interim dividend of Rs 10,000 crore to the centre. In FY14, the central bank had transferred Rs 52,679 crore, FY15 Rs 65,896 crore, FY16 Rs 65,876 crore, FY17 Rs 30,659 crore and in FY18 Rs 50,000 crore.

On February 5, CNBC-TV18 had reported that the government is targeting Rs 68,000 crore dividend from the central bank for FY19.

Today, union finance minister Arun Jaitley addressed the post-budget meeting of the central board and broadly outlined the various reforms and policy measures taken by the government over the last four years and the effects thereof.

Payment of interim dividend was one of the contentious issues between the government and the RBI under earlier Governor Urjit Patel.

Patel resigned in December and was immediately replaced by retired bureaucrat Shaktikanta Das who has been systematically addressing every single issue that the government had been raising with the RBI.

Earlier this month, economic affairs Secretary Subhash Chandra Garg had said the government expects Rs 28,000 crore from the RBI as interim dividend during the current fiscal.

Former Chief Economic Adviser Arvind Subramanian had in Economic Survey 2016-17 said the RBI was already exceptionally highly capitalised and nearly Rs 4 lakh crore of its capital transfer to the government can be used for recapitalising the banks and/or recapitalising a Public Sector Asset Rehabilitation Agency.

The RBI, which follows July-June financial year, has already transferred Rs 40,000 crore in the current fiscal.

The government has projected to mobilise Rs 82,911.56 crore as dividend or surplus from the RBI, nationalised banks and financial institutions during 2019-20.

After making provision for bad and doubtful debts, depreciation in assets, contribution to staff and superannuation fund and for all matters for which the provision is to be made by or under the Act or which are usually provided by bankers, the balance of the profits shall be paid to the central government, as per the RBI Act.

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