RBI's future surplus transfers to depend on its net income

The Finance Ministry on Monday said that the quantum of RBI's surplus transfer to the government in the coming years would depend on the central bank's net income.

Besides, it will depend on the 'required realised equity' as a per cent of RBI's balance sheet and 'available realised equity' as a per cent of RBI's balance sheet in the coming years, the ministry said in response to a question in the Lok Sabha on the opening day of the winter session Parliament.

The transfer of reserves, the ministry said, shall be governed by the legal provisions of the RBI Act, 1934, read with the recommendations of the Jalan Committee as accepted by the RBI.

BJP MP from Mumbai Gopal Chinayya Shetty had asked if the government is likely to get additional dividend from the RBI in the future.

As decided by the Central Board of the Reserve Bank of India (RBI) in its meeting held on November 19, 2018, the RBI, in consultation with the Government of India, constituted an expert committee under the chairmanship of former RBI Governor Bimal Jalan on December 26, 2018, to review the extant Economic Capital Framework of the RBI.

The committee was supposed to suggest an adequate level of risk provisioning that the RBI needs to maintain and propose a suitable surplus distribution policy taking into account all the likely situations of the central bank.

"The transfer of surplus to the government for the year 2018-19, ending June 30, 2019, was made in accordance with the recommendations of the committee and accordingly a sum of Rs 1,75,987 crore was transferred by RBI to the Government of India," the Finance Ministry said in a written response.

( With inputs from IANS )