The Reserve Bank of India (RBI) has decided to transfer Rs 1.76 lakh crore to the government on 26 August 2019 under the head of dividend and surplus fund. The move has been taken after RBI’s board of directors accepted the recommendations of a committee headed by former central bank governor Bimal Jalan.
The RBI board has decided to transfer Rs 1,76,051 crore to the government.
It has been identified as a surplus of Rs 1,23,414 crore and an additional provision of Rs 52,637 crore for the year 2018-19.
This amount of this additional provision has been extracted on the basis of the revised rules (ECF) under the RBI’s Economic Capital.
Final Report By Bimal Jalan Committee
The Bimal Jalan Committee was asked to decide how much reserve money the central bank should have.
In this Committee, Finance Secretary Rajiv Kumar was involved on behalf of the government.
The committee finalized its report on 14 August 2019. The money received from RBI will help the government in its efforts to strengthen the economy.
In August 2019, various steps were announced by Union Finance Minister Nirmala Sitharaman to improve the state of the economy.
The additional money will come to the central government due to additional transfers by RBI.
This will help the government to repay public loans and infuse capital in banks.
A six-member Jalan Committee was formed under the chairmanship of former Governor of Reserve Bank of India (RBI) Bimal Jalan.
This Bimal Jalan Committee was formed on 26 December 2018. The committee was formed to review the Economic Capital Framework (ECF) for RBI.
Bimal Jalan Committee member
Apart from former RBI governor Bimal Jalan, the committee also includes former deputy governor Rakesh Mohan, finance secretary Rajiv Kumar, central bank deputy governor NS Vishwanathan and two central board members Bharat Doshi and Sudhir Mankad.
Three committees have been formed even before this. Earlier, three committees have been formed to tell about how much Reserve Bank of India (RBI) should have as a reserve model.
A committee headed by V Subrahmanyam in 1997, Usha Thorat in 2004 and YH Malegam in 2013 was formed.