The standoff between the Centre and the Reserve Bank of India (RBI) turns even uglier with new report emerging that the Finance Ministry has asked the RBI to transfer a surplus of Rs 3.6 lakh crore, more than a third of the total Rs 9.59 lakh crore reserves of the central bank, to the government, according to an Indian Express report.
The Finance Ministry has suggested that the surplus money should be jointly managed by the government and RBI. Ther RBI refused to oblige Centre's suggestions saying this move can adversely impact macroeconomic stability.
The government believes that RBI has over-estimated its capital reserves requirements resulting in the excess capital of Rs 3.6 lakh crore. And this is the money the government wants to use for recapitalisation of PSU banks.
The finance ministry has objected to RBI's staggered surplus distribution policy (SSDP) under which the bank must transfer its surplus to the government.
The ministries says RBI acts 'arbitrarily' when it came to the transfer of the interim surplus, the report further said.
In 2017-18, Centre received a surplus of Rs 50,000 crore from the RBI. In the previous year, RBI transferred a surplus of Rs 30,659 crore to the government.