SME Times News Bureau | 17 Jul, 2019
The Bimal Jalan panel on Wednesday finalised the report on RBI surplus
capital and though not unanimous on the quantum of transfer, it has
recommended 3-5 year formula for transfer of surplus in tranches to the
government.
Sources said there will be periodic reviews of Economic Capital Framework (ECF) to follow after each cycle.
Since
it is not an unanimous report, the final report - to be submitted to
the RBI in 10 days - may record dissents to the recommendations made by
the panel. The report has already been long delayed.
The recommended quantum to be transferred was not divulged since it is yet to be submitted.
There
was dissent from the government nominee, Finance Secretary Subhash
Chandra Garg, who according to sources wanted more surplus reserves to
be given to the government than what was recommended by the panel.
The Bimal Jalan panel is a six-member committee appointed in December 2018 and entrusted to review the RBI's capital reserves.
The
RBI has a surplus capital of over Rs 9.6 lakh crore. The panel was
formed at a time when the government and the central bank were having
differences on the issue of RBI's surplus transfer to the government.
The
controversy over the transfer of surplus reserves began after reports
emerged that the government was seeking Rs 3.6 lakh crore from the RBI.
The
government had then said it was only keen on a formulae in tune with
global practice to fix an appropriate 'economic' capital framework for
the central bank and denied having sought Rs 3.6 lakh crore from RBI.
The
Finance Ministry which is represented by the Finance Secretary in the
panel is of the view that the buffer of 28 per cent of gross assets
maintained by the RBI is well above the global norm of around 14 per
cent.
Following this, the RBI board in its meeting on November
19, 2018, decided to constitute a panel to examine the Economic Capital
Framework.