NEW DELHI: The Bimal Jalan Panel, which was supposed to submit its report on the RBI's economic capital framework, is likely to delay its recommendations following the exit of finance secretary Subhash Chandra Garg, who was one of the members of the six-member panel.
According to sources, Garg was the sole dissenter strongly opposed the capital framework decided by the committee and had refused to sign it, instead of giving a dissent note. The panel had decided to go ahead with the report, adding his dissent note. Now that he has left, however, the panel is in a fix whether to go ahead and has decided to consult RBI before turning in the final report.
“The report is finalised, but the only catch is whether to add his dissent note and whether the new DEA secretary can sign the note as Garg had left without signing the report. We will be taking the view of RBI panel and will meet one more time ahead of signing the report,” said a member who refused to be named.
On July 18, when the committee met for the last time to decide on the exact amount to be transferred by the RBI, the general consensus was to transfer the surplus over the next 3-5 years and not in one go, but Garg had strongly objected to this.
The reason was that the Receipts Budget had allocated Rs 23,130 crore more towards the “dividend or surplus of the RBI, nationalised banks and financial institutions” to `1.06 lakh crore in 2019-20, compared to the Interim Budget. Many panel members had also privately complained about Garg’s tone, which they found too harsh for their comfort.
Interestingly, it was on Garg’s insistence that the RBI formed the six-member Jalan committee in December. Meanwhile, when Garg was asked about his reasons for not signing the report, he said, “I have been saying this; the committee is still deliberating it. So, now those deliberations will be taken forward by a new representative of the department.” Sources say the report has to be submitted ahead of RBI’s central board meeting on August 16.