- The Reserve Bank Central Board accepted the recommendations of the Bimal Jalan Committee and allowed the transfer of surplus amount 1.23 lakhs crores to the government.
- 1.76 lakhs crores= 1.23 lakh crores( surplus of 2018-19)+ 52637 Crores ( excess provision for Revised Economic Capital Framework)
- The Reserve Bank of India Central Board has today decided to transfer an amount of ₹ 1,76,051 crore to the Government of India , with a surplus of ₹ 1,23,414 crore for the year 2018-19 and an amount of ₹ 52,637 crore earmarked as additional provision as per the approved revised Economic Capital Framework (ECF) .
- This 1.76 lakhs crores includes interim dividend of Rs 28000 crores which is paid in Feb’19.
- Reserve Bank of India, in consultation with the Government of India, constituted an expert committee (Chairman: Dr. Bimal Jalan) to review the existing economic capital structure of Reserve Bank of India .
- The committee’s recommendations were guided by the fact that the Reserve Bank takes primary security measures for monetary, financial and external stability.
- The Central Board accepted all the recommendations of the Committee and finalized the Reserve Bank Accounting for 2018-19 using a revised framework to determine risk provisioning and surplus transfer. The implications of this decision are given below:
(i) Equity Received: Considering that the available equity received was 6.8 per cent of the balance sheet, while the recommendations recommended by the committee were 6.5 per cent to 5.5 per cent of the balance sheet, the CRB (contingent Risk Buffer) ceiling was ₹ 11,608 crore and the minimum limit was ₹ 52,637 crore. The Central Board decided to maintain the achieved equity level at 5.5 per cent of the balance sheet and consequently the risk provisioning of ₹ 52.537 crore was withdrawn.
(ii) Economic Capital Level: Whereas the revised framework will be between 24.5 per cent to 20.0 per cent of the balance sheet (depending on the level of equity received and available revaluation balance) of the Reserve Bank’s economic capital level as of June 30, 2019. Technically allows the economic capital to be 23.3 percent of the balance sheet as on 30 June 2019. As the financial flexibility was within the desired range, the entire net income of ₹ 1,23,414 crore for the year 2018-19 , of which an amount of ₹ 28,000 crore had already been paid as interim dividend, was transferred to the Government of India. will be given. This amount will be in addition to the additional risk provision of ₹ 52,637 crore which is being withdrawn and will be transferred to the Government as a result.