The Reserve Bank of India’s board on Friday approved the transfer of Rs 57,128 crore as a surplus to the central government for the accounting year 2019-20. The RBI, however, will maintain the contingency risk buffer at 5.5 per cent.
The surplus transfer is sharply lower than the Rs 1.76 lakh crore that the RBI had transferred to the government last year. But, it is close to the Rs 60,000 crore that the government had budgeted as a dividend.
RBI had last year approved a transfer of Rs 1.23 lakh crore as dividend and Rs 52,640 crore from its surplus capital to the government. The excess reserve transfer was in line with the recommendation of a committee led by former RBI governor Bimal Jalan. In 2017-18, Rs 40,659 crore was transferred to the government as a dividend by the RBI.
The central board of the RBI met on Friday under the chairmanship of Governor Shaktikanta Das. Apart from him, deputy governors B.P. Kanungo, Mahesh Kumar Jain and Michael Patra, and other directors on the board attended the meeting.
The members on RBI’s board include N Chandrasekaran, the chairman of Tata Group, economist Ashok Gulati, Sun Pharma’s managing director Dilip Shanghvi, Manish Sabharwal, co-founder of Teamlease Services, Satish Marathe, founder member of Sahakar Bharati, S Gurumurthy, co-convenor of Swadeshi Jagran Manch, Revathy Iyer, a retired bureaucrat and Sachin Chaturvedi who heads a think tank.
“The Board reviewed the current economic situation, continued global and domestic challenges and the monetary, regulatory and other measures taken by RBI to mitigate the economic impact of COVID-19 pandemic,” the central bank said in a statement.
The board also discussed setting up of an innovation hub and approved RBI’s annual reports and accounts for 2019-20. In his briefing post the bi-monthly monetary policy committee announcement last week, Governor Das had announced plans to set up an innovation hub.