new Delhi. The Central Board of Reserve Bank of India (RBI) has approved the payment of dividend of Rs 57,128 crore to the Central Government. The move is in line with budget expectations, but it will not be able to compensate for the loss in government revenue due to the sluggish economy and the Kovid-19 epidemic. The board has agreed to transfer a surplus of Rs 57,128 crore to the government for the accounting year 2019-20. Last year, the central bank transferred Rs 1.76 lakh crore to the government. Of this, Rs 1.23 lakh crore was given as dividend and Rs 52,637 crore was given as surplus capital under the provisions of the Central Bank's Revised Economic Capital Settlement (ECF).
The board has decided to maintain the capital buffer ratio for emergency risk at 5.5 percent. According to the Reserve Bank's release, the decision was taken in a board meeting led by Governor Shaktikanta Das on Friday. That meeting took place through video conference. This was the 54th meeting of the Central Board. The board meeting reviewed the current economic situation, global and domestic challenges, and monetary, regulatory and other measures taken by the central bank to overcome the economic impact of Kovid-19. Finance Minister Nirmala Sitharaman had made a provision of 60,000 crore rupees from the Reserve Bank and other banks in the Budget 2020-21 to bridge the fiscal deficit. But government officials were expecting some more from the Reserve Bank.
The government's revenue receipts are likely to decline much more than anticipated during the Kovid-19 epidemic. For the first time since 1979, the economy is on a decline throughout the year. In the wake of the hurdles in the business due to this epidemic, there is every possibility that the government will not be able to achieve its tax collection target. Not only this, the government is forced to spend more to revive the economy affected by the epidemic, which will increase the pressure on the fiscal deficit. The main sources of the central bank's earnings are currency trading and government bonds, besides the printing of notes or the minting of coins. A portion of this income is retained by the Reserve Bank for its operating expenses and contingency needs. The remaining amount is transferred to the government as dividend.
The financial year of the Reserve Bank is from July to June. From FY 2021-22, it will be in line with the government's April-March fiscal year. In the current year, the financial year of the Reserve Bank will be nine months, which will be completed in March. The statement issued by the Reserve Bank said that the Central Board also discussed the proposal to set up an innovation center. The board reviewed the status of various operating areas of the central bank during the last year and also approved the annual report and audit of the Reserve Bank of India for 2019-20. The surplus paid by the Reserve Bank to the government is called dividend. The central bank transferred Rs 65,896 crore to the government in FY 2018-19, Rs 50,000 crore in 2017-18 and Rs 30,659 crore in 2016-19.
This post was published on August 15, 2020 12:33 pm
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