The RBI transfers Rs. 57,128 crores surplus to the government: A dividend amount of Rs. 57,128 crores have been approved by the Reserve Bank of India to the government for its fiscal year.
As recommended by the Jalan Committee to review RBI’s capital framework. A decision is to take to maintain a contingency risk buffer of 5.5 percent at the minimum threshold.
How the dividend is transferred?
The dividend is approved by the Central board on a video conference meeting to discuss the financial operations and the balance sheet for the 2019-20 financial year. It was its 584th meeting.
On 14th August 2020(Friday), the RBI released a notification informing that the Board has approved the transfer of Rs 57128 crores. As a surplus to the central government for the accounting year 2019-2020 and decided to maintain the contingency risk buffer at 5.5 percent.
The dividend amount transferred by the RBI to the central government seems very important as in the wake of financial constraints due to the COVID -19 epidemic which led to an expectation of higher transfer of surprise to the government.
The Jalan Committee suggests that the RBI’s balance sheet has to maintain a range of 5.5 percent to 6.5 percent i.e above the level of 2.4 percent of the balance sheet as on 30th June 2018.
The committee recognized the RBI’s contingency risk buffer as a country’s saving for a rainy day meaning that when the country faces a financial stability rise. The RBI has securely maintained it as it’s the role of a lender of last resort.
Issues like domestic, monitory, and regulatory challenges, global topics, and other important measures to take by the RBI to mitigate the economic import of the COVID -19 epidemic were also discussed by the RBI board.
Various areas of the operations of the Bank of the last year and the approved annual report and accounts of the RBI of 2019-2020 gear is also discussed by the board.