- Decision in RBI board meeting
- Surplus money transferred to Government
The Reserve Bank of India (RBI) has decided to give 99,122 crore rupees from its surplus amount to the central government. It was approved in the meeting of the central board of the Reserve Bank on Friday.
This amount is for nine months from July 2020 to 31 March 2021. The board has decided that the emergency risk buffer will be maintained at 5.50% per cent in the Reserve Bank. According to the Jalan committee’s recommendation, 5.5 to 6.5 per cent of the books of the Reserve Bank should be kept as emergency funds.
Decision in board meeting
This decision was taken in the 589th meeting of the Reserve Bank’s board on Friday, May 21. Giving information about this decision, the Reserve Bank said in a statement, ‘The accounting year of the Reserve Bank has been changed from April to March, earlier it was from July to June. The board therefore discussed the functioning of the Reserve Bank of India during the nine-month transition period from July to March 2021. The board has approved the annual report and accounts of the Reserve Bank during this transition. The board has also approved the transfer of Rs 99,122 crore to the central government.
1.76 lakh crores was given in the year 2019
It is worth noting that before this, the Reserve Bank had transferred Rs 1.76 lakh crore to the Modi government in the year 2019. Then the decision of the Reserve Bank was severely criticized by the opposition. This amount was transferred as per the recommendations of Bimal Jalan Committee.
What is a surplus fund
The surplus fund that the Reserve Bank makes during the year, the amount left after deducting the entire expenses etc., is its surplus fund. It is a kind of profit. Now the real owner of the Reserve Bank is the government, so according to the rules, the Reserve Bank gives a large part of this profit to the government and keeps a part of it under risk management.
Decide to give to the government
The Reserve Bank pays the government dividends every year from its surplus amount. Significantly, the Reserve Bank of India was established in the year 1934 and it is governed by the Reserve Bank of India Act 1934. Section 47 of Chapter 4 of this Act states, ‘Whatever surplus fund will be left out of the profits of the Reserve Bank, it will give to the Central Government.’