RBI to transfer 99,122 crore surplus to central government
The Reserve Bank of India (RBI) has decided to transfer a surplus of ??99,122 crore to the central government, the umbrella bank said on Friday. The decision to transfer the surplus was taken at the 589th Reserve Bank of India Central Board Meeting held today under the chairmanship of RBI Governor Shaktikanta Das via video conference.
During its meeting, the Board of Directors reviewed the current economic situation, global and national challenges and recent policy measures taken by the Reserve Bank to mitigate the negative impact of the second wave of COVID-19 on the economy.
With the change in the accounting year of the Reserve Bank to April-March (early July-June), the Board discussed the operation of the Reserve Bank of India during the nine-month transition period (July 2020-March 2021) and approved the annual report. and the accounts of the Reserve Bank for the transitional period. The Board also approved the transfer of ??99,122 crore surplus for the central government for the nine-month accounting period ended March 31, 2021 (July 2020-March 2021), while deciding to maintain the buffer for emergency risks at 5.50%.
In a note, Barclays said that “RBI’s dividend announcement will relieve some of the tax burden on the government, giving it more leeway for the current fiscal year. This could be particularly helpful in easing the downside. impact of the second wave of COVID-19. “
“In our projections, we took into account a dividend of ??65,000 from the RBI, while the government’s budget forecast included ??45,000 crore from the central bank. In our view, the upside surprise could have been due to rising returns on domestic assets and changes in central bank accounting practices – the RBI recently allowed itself to record profits on its transactions in changes from a weighted average cost perspective, ”Barclays said in a note.
“Our estimates show that this move could have helped the central bank increase returns on its foreign holdings. In addition, the increase in holdings of domestic government securities likely further boosted the central bank’s income for the year.”
Deputy Governors Shri Mahesh Kumar Jain, Dr Michael Debabrata Patra, Shri M. Rajeshwar Rao, Shri T. Rabi Sankar and other Directors of the Central Council, viz. Shri N. Chandrasekaran, Shri Satish K. Marathe, Shri S. Gurumurthy, Ms. Revathy Iyer and Professor Sachin Chaturvedi attended the meeting. Shri Debasish Panda Secretary, Department of Financial Services and Shri Ajay Seth, Secretary, Department of Economics also attended the meeting.
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