The surplus distribution policy of RBI is determined in accordance with section 47 of the RBI Act, 1934, Sitharaman said in a written reply to Lok Sabha.
“The quantum of surplus transfer to the government in the coming years would depend on RBI”s net income, ”required realized equity” as a per cent of RBI”s balance sheet and ”available realized equity” as a per cent of RBI”s balance sheet in the coming years, and shall be governed by the legal provisions of the RBI Act, 1934 read with the recommendations of the committee as accepted by RBI,” Sitharaman said.
The central board of the RBI, in its meeting in November 2018, in consultation with the government had decided to constitute an expert committee under the chairmanship of former RBI governor Bimal Jalan to suggest an adequate level of risk provisioning that RBI needs to maintain.
The committee, formed on December 26, 2018, was tasked to propose a suitable surplus distribution policy taking into account all the likely situations of the RBI.
The finance minister was replying to a question asked by Gopal Chinnaya Shetty if the issue of surplus reserves of RBI was resolved as per the suggestions of the Jalan committee and whether in future the government was likely to get additional dividend from RBI as per the recommendations of the said committee.
The Bimal Jalan expert committee had submitted its report to RBI on August 14, 2019.
The central board of RBI, in its meeting on August 26, 2019, had accepted all the recommendations of the committee and finalised RBI”s accounts for 2018-19 using the revised framework to determine risk provisioning and surplus transfer.
“The transfer of surplus to the government for the year 2018-19, ended June 30, 2019 was made in accordance with the recommendations of the committee and accordingly a sum of Rs 1,75,987 crore was transferred by RBI to the government,” the minister said in the lower house.
The transfer of reserves comprised Rs 1,23,350 crore of surplus for 2018-19, of which Rs 28,000 crore was already paid as interim dividend on March 28, 2019, and Rs 52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF), Sitharaman said.