FinMin expects Rs 69K-crore dividend from RBI in FY20https://indianexpress.com/article/business/finmin-expects-rs-69k-crore-dividend-from-rbi-in-fy20-5571036/

FinMin expects Rs 69K-crore dividend from RBI in FY20

Notably, RBI had set up a committee to work out the contours of the RBI’s economic capital framework, which is seen as crucial in addressing the contentious issue of the transfer of surpluses as dividend to the Centre.

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The Finance Ministry had, earlier, sought an amount of Rs 13,140 crore as additional dividend for the year 2016-17, which it believes has been pending with the Reserve Bank.

The Finance Ministry expects Rs 69,000 crore dividend from the Reserve Bank of India (RBI) in the next financial year, a senior ministry official said. In the Budget for 2019-20, the government has estimated receipt of Rs 82,911.56 crore as dividend or surplus from the RBI, nationalised banks and financial institutions in next fiscal.

For the current financial year, the government is expecting an interim dividend transfer of Rs 28,000 crore, which, if approved by the central board of the RBI, will take the total surplus transfer by the central bank to Rs 68,000 crore in 2018-19. The Rs 28,000 crore interim dividend would include some funds pertaining to financial years 2016-17 and 2017-18.

“We have asked for some surplus retained by RBI for earlier financial years. We have asked RBI to pay Rs 13,000 crore from 2016-17 and Rs 14,000 crore from 2017-18,” the official said. The RBI, which follows July-June financial year, has already transferred Rs 40,000 crore in August 2018. The interim dividend, to be accounted for in the current fiscal year, is expected to play a crucial role in Centre’s effort to contain the fiscal deficit.

The Finance Ministry had, earlier, sought an amount of Rs 13,140 crore as additional dividend for the year 2016-17, which it believes has been pending with the Reserve Bank. Notably, RBI had set up a committee to work out the contours of the RBI’s economic capital framework, which is seen as crucial in addressing the contentious issue of the transfer of surpluses as dividend to the Centre. The Committee on Economic Capital Framework headed by former RBI Governor Bimal Jalan — announced on December 27, 2018, two weeks after Shaktikanta Das took over as the new RBI Governor in place of Urjit Patel — would propose a suitable profits distribution policy taking into account all the likely situations of the RBI, including the situations of holding more provisions than required as well as the central bank holding less provisions than required.