Published On: Mon, Aug 26th, 2019

RBI to provide 1.76 Lacs crore Rupees help to Modi Government – NDA 2

  • RBI comes with Modi government to deal with recession, will help 1.76 lakh crore rupees.
  • RBI to provide 1.76 Lacs crore Rupees help to Modi Government – NDA 2.
  • RBI estimated to have 9 lakh crore surplus fund.
  • The committee was formed in December last year under the chairmanship of former RBI Governor Bimal Jalan.

Mumbai : The Reserve Bank of India on Monday decided to transfer Rs 1.76 lakh crore of its surplus and profits to the government. RBI will give this amount to the government as dividend and additional reserves. The RBI board, following the advice of a high-level panel headed by its former governor Bimal Jalan, decided to give it to the additional reserve government.

RBI to provide 1.76 Lacs crore Rupees help to Modi Government - India 24x7 News

RBI to provide 1.76 Lacs crore Rupees help to Modi Government – India 24×7 News

On December 26, 2018, the RBI constituted a 6-member committee headed by former Governor Bimal Jalan to decide how much money RBI should keep in its reserve fund and how much money the government should transfer to the government.

Reserve funds equal to 28% of total assets with RBI

Former RBI governor Urjit Patel resigned in December last year due to a dispute between the central bank and the government over the cash surplus issue. According to various estimates, RBI has a surplus fund of Rs 9 lakh crore. This constitutes about 28% of RBI’s total assets. The government said that central banks of other big countries hold 14% of their assets in reserve funds.

The availability of surplus funds of the Reserve Bank will help the government to keep the fiscal deficit under control. The government has set a fiscal deficit target of 3.3% of GDP in the current financial year. Apart from surplus capital transfer, the government is expected to get 90 thousand crore rupees as dividend from the RBI in the current financial year. 68 thousand crores was received last year.

Earlier 3 committees were formed to decide the fund

Earlier, three committees were formed to decide RBI’s Reserve Fund – V Subramaniam (1997), Usha Thorat (2004) and YS. Malegam (2013) Committee. The Subramanian committee recommended 12% and Thorat committee 18% reserves. The board of RBI did not accept the recommendation of the Thorat Committee. Rather, the recommendation of the Subramanian Committee was continued. The Malegam Committee did not provide any data but said that RBI should transfer sufficient amount every year.

How much money will the government get

The RBI board approved the transfer of Rs 1,76,051 crore to the Government of India. RBI has approved surplus transfer. Surplus amount will be Rs 1,23,414 crore. The RBI has a reserve of Rs 9.2 lakh crore, including a contingency fund, currency and gold revaluation account, which is 25 per cent of the total balance sheet size of the central bank.

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