New Delhi(IBNS): The Reserve Bank of India on Monday announced it has accepted the recommendations of Bimal Jalan Committee following which it approved surplus transfer to the Centre.
The sum amounts to Rs1,76,051 crore.
“The Central Board of the Reserve Bank of India (RBI) today decided to transfer a sum of ₹1,76,051 crore to the Government of India (Government) comprising of ₹1,23,414 crore of surplus for the year 2018-19 and ₹52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF) adopted at the meeting of the Central Board today,” the RBI said in a statement.
The bank said: ” It may be recalled that the RBI, in consultation with the Government of India, had constituted an Expert Committee to Review the Extant Economic Capital Framework of the Reserve Bank of India (Chairman: Dr. Bimal Jalan). The Committee has since submitted its report to the Governor of the RBI. The Committee’s recommendations were based on the consideration of the role of central banks’ financial resilience, cross-country practices, statutory provisions and the impact of the RBI’s public policy mandate and operating environment on its balance sheet and the risks involved.”
The Committee’s recommendations were guided by the fact that the RBI forms the primary bulwark for monetary, financial and external stability.
“Hence, the resilience of the RBI needs to be commensurate with its public policy objectives and must be maintained above the level of peer central banks as would be expected of a central bank of one of the fastest growing large economies of the world,” it said.
Reacting to the move, activist and lawyer Prashant Bhushan tweeted: ” After bankrupting all PSUs and banks, the bankrupt government finally got its hands on RBI’s reserves!.”
Congress’ data analytics chief Praveen Chakravarty said: “RBI’s stock of reserves accumulated over several previous governments is now handed over to this govt It is a raid on RBI’s reserves & autonomy, over which the former Governor & Deputy Governor had resigned in protestYet another institution crumbles.”