NEW DELHI: The Reserve Bank of India (RBI) on Monday decided to transfer Rs 28,000 crore as interim dividend to the Union government, ending months of speculation about the sum the government expected, and the actual sum RBI Board would agree to pay.
The decision was taken at the RBI’s Central Board meeting in Delhi.
“Based on a limited audit review and after applying the extant economic capital framework, the Board decided to transfer an interim surplus of Rs 280 billion (Rs 28,000 crore) to the Central government for the half-year ended December 31, 2018,” RBI said in a statement.
This is the second successive year that the RBI will be transferring an interim dividend to the government. It had paid Rs 10,000 crore last year as an interim dividend. RBI’s annual year runs from July to June.
The dividend will help the government’s immediate cash requirement to fund its income support programme for farmers ahead of general elections. As far as the fiscal year of the government goes, it has already received Rs 40,000 crore dividend from RBI, taking up the total to Rs 68,000 crore.
The Bimal Jalan Committee will decide the larger issue of RBI’s reserves and surplus. It is likely to meet on February 22.
Finance Minister Arun Jaitley made his customary post-budget address to the RBI board on Monday.
Addressing a press conference, RBI Governor Shaktikanta Das said that he will meet heads of public and private sector banks on February 21 to discuss the transmission of interest rate cuts to borrowers.
“We’ll discuss that issue with the banks and see what needs to be done,” Das said.
The RBI had, earlier this month, cut the benchmark interest rate by 0.25 per cent to 6.25 per cent.
Das said that while credit growth to the commercial sector as a whole has shown some improvement, it is not broad-based. “It is not flowing into various sectors as it should be,” he said.
However, on the liquidity crunch in MSMEs, he said that the ball lies in the banks’ court — to implement and restructure the loans of eligible MSMEs as per the rules and guidelines are given in the MSME package announced on January 1, 2019.