Total such transfers this year add up to Rs68,000 cr
MUMBAI: The board of directors of Reserve Bank of India (RBI) has decided at its meeting held on February 18, to transfer Rs28,000 crore as interim dividend to the Government for the period July to December 2018 – the first half for RBI
“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 to the central government for the half-year ended December 31, 2018,” the RBI said in its statement.
With this transfer, the total dividend payout by the RBI to the government during the current financial year stands at Rs68,000 crore. The RBI follows the July-June fiscal calendar.
The RBI had transferred an interim dividend of Rs10,000 crore in 2017-18 on request from the Government. In FY18, the total dividend received by the government from the RBI stood at Rs50,000 crore. In 2016-17, the Centre had received Rs65,876 crore as dividend from the RBI.
According to a written reply by Finance Ministry in Rajya Sabha on February 12, the RBI had transferred Rs40,000 crore in August 2018 as excess surplus to the government.
An official statement said the interim surplus has been decided after a limited audit review and after applying the Economic Capital Framework (ECF).
This is the second successive year that RBI decides to transfer interim surplus to the government. Transfer of surplus by RBI to its owners – the Central Govt, has been at the heart of the disputes between the Government and the Central Bank during the past close to one year.
Transfer of interim surplus would help the government finance various policy initiatives that were announced during interim Budget and will help to manage its fiscal position.
The move gains significance in the wake of the recent budget announcement by the central Government that included populous decisions such as direct annual income transfer of Rs6,000 to farmers in three equal installments and exemption of income tax for individuals with taxable income below Rs5 lakh per annum.
Earlier, the Finance Minister Arun Jaitley at the post-Budget meeting of the Central Board discussed various “issues related to fiscal policy decisions taken by the government”.