RBI Unlikely To Transfer Funds Set Aside For Contingencies To Government; Board Meeting Postponed To 18 February

Citing that there has been no precedence of a dividend being paid from funds that have already been set aside for contingencies to the government, the Reserve Bank of India (RBI) is not likely to transfer Rs 27,330 crore that was set aside in 2016-17 and 2017-18, reports The Hindu.

Previously in a written response to the Rajya Sabha, Piyush Goyal had informed that the government had requested the RBI for an interim surplus for the financial year 2018-19 on the lines of previous financial year and transfer of the amount withheld from the surplus of 2016-17 and 2017-18.

Government’s demand for more funds has been an issue of contention between the central bank and itself. RBI has also formed a committee under Bimal Jalan to look into the economic capital framework of the central bank.

Also, the RBI has now decided to conduct statutory audit of its account twice a year, so that it can transfer the surplus to the government biannually.

Meanwhile, the first meeting of the central board of the bank after the interim budget has been postponed to 18 February. Earlier, the meeting was supposed to take place today (9 February).

The RBI board is going to take up request of the government for payment of interim dividend for the current financial year, informed the sources as reported by Moneycontrol.com.

Last financial year, the RBI had paid an interim dividend of Rs 10,000 crore, while it has already transferred Rs 40,000 crore in the current fiscal. The dividends from RBI help the government tackle fiscal deficit.