Surplus money transfer from RBI in future to depend on income, expert panel suggestions: FM
New Delhi: Finance Minister Nirmala Sitharaman on Monday said transfer of surplus reserves from the Reserve Bank of India (RBI) to the government in future will depend on net income and other financial parameters of the central bank besides the recommendations of the expert committee on excess capital.
The surplus distribution policy of RBI is determined in accordance with section 47 of the RBI Act, 1934, Sitharaman said in a written reply to Lok Sabha.
"The quantum of surplus transfer to the government in the coming years would depend on RBI's net income, 'required realized equity' as a per cent of RBI's balance sheet and 'available realized equity' as a per cent of RBI's balance sheet in the coming years, and shall be governed by the legal provisions of the RBI Act, 1934 read with the recommendations of the committee as accepted by RBI," Sitharaman said.
The central board of the RBI, in its meeting in November 2018, in consultation with the government had decided to constitute an expert committee under the chairmanship of former RBI governor Bimal Jalan to suggest an adequate level of risk provisioning that RBI needs to maintain.
The committee, formed on December 26, 2018, was tasked to propose a suitable surplus distribution policy taking into account all the likely situations of the RBI.
The finance minister was replying to a question asked by Gopal Chinnaya Shetty if the issue of surplus reserves of RBI was resolved as per the suggestions of the Jalan committee and whether in future the government was likely to get additional dividend from RBI as per the recommendations of the said committee.
The Bimal Jalan expert committee had submitted its report to RBI on August 14, 2019.