NEW DELHI: The Bimal Jalan committee, which was looking into how much capital reserves the Reserve Bank of India should hold, has finalised its report and will submit it to RBI soon for its approval.
The six-member panel, led by the former RBI governor, has suggested transfer of the central bank’s surplus funds to the government in tranches spread over 3-5 years, officials said.
However, there is no clarity on the amount the panel has recommended to be transferred to the government.
According to finance ministry sources, the panel met on Wednesday to iron out differences among members. Reports suggest there was a lack of consensus on the assessment of surplus amount.
“Today, the committee met for the last time and the report has been finalised. There are dissent notes and the committee is likely to submit the report in the next two weeks to the RBI Board after documenting the whole discussions including the dissent notes,” a senior official told TNIE.
“The report will not be conclusive. It will be subject to RBI’s approval and the RBI board can modify or reject the recommendations if it so feels,” the official added.
The panel’s recommendations hold importance especially when the government requires larger non-tax revenues to meet its fiscal target.
The surplus transfer, if any, will be in addition to the Rs 90,000 crore dividend payouts target set by the government from RBI in the current financial year against Rs 68,000 crore received last fiscal.
The Jalan panel was appointed on December 26, 2018, to review RBI’s economic capital framework after there was a war of words between the finance ministry and the then RBI Governor Urjit Patel, which resulted in the governor eventually quitting.
Why the government badly wants RBI’s money
RBI’s surplus capital transfer would help the government meet its fiscal deficit target as it will come as a windfall to the exchequer. According to various estimates, the central bank has over `9 lakh crore of surplus capital with it.