The panel will include Economic Affairs Secretary Subhash Chandra Garg and RBI Deputy Governor N S Vishwanathan.
It also recommended that the RBI accounting year (July-June) may be brought in sync with the fiscal year (April to March) from the financial year 2020-21 as it could reduce the need for interim dividend being paid by the central bank.
Garg had refused to sign on the report finalised by the former Reserve Bank of India governor Bimal Jalan-led committee reviewing the central bank's economic capital framework (ECF).
The main difference of opinion between RBI and FinMin is over the transfer of the RBI's 'excess' capital reserves. The Jalan panel seeks to convince finance secretary Subhash Garg to soften his dissent note language. The move is aimed at maintaining the now-cordial relations between the RBI and the finance ministry.
A high-level panel led by former RBI governor Bimal Jalan, set up to decide the appropriate capital reserves that the central bank should maintain, on Wednesday finalised its report.
The Reserve Bank on Wednesday approved a Rs 2.11 lakh crore dividend payout to the central government for 2023-24, more than double the amount it paid for the previous 2022-23 financial year. The decision was taken at the 608th meeting of the Central Board of Directors of the Reserve Bank of India held under the chairmanship of Governor Shaktikanta Das.
The thinking at the Centre is that since the RBI has ramped up purchases of government bonds, the interest earned on them will be transferred to the exchequer as dividend.
'The Jalan Committee has now provided very clear guidelines on how the (RBI's) balance sheet should be looked at, what kind of disclosures should be made, what are the principles on which the Contingency Risk Buffer should be maintained, what should be the revaluation reserves, and the market risk to the Contingency Risk Buffer.'
The RBI raked in a massive net income gain from foreign exchange currency sales as a buffer for the rupee during tumultuous geopolitical upheavals last year owing to Russia's invasion of Ukraine.
While the fiscal year has just begun, any windfall surplus will be welcomed by the government as it bids to meet the fiscal deficit target of 5.9 per cent of GDP, amidst lack of clarity on exactly to what extent will recession in the West impact India's trade and tax collections.
Owing to Finance Minister Nirmala Sitharaman being new to her role, a number of crucial announcements in the Budget bore Garg's imprint, especially the decision to borrow in overseas markets, reduce the fiscal deficit as a percentage of gross domestic product, and resort to off-Budget borrowing to meet that target, says Arup Roychoudury.
The Reserve Bank on Friday approved the transfer of Rs 99,122 crore as surplus to the central government for the accounting period of nine months ended March 31.
The windfall from RBI may be used to trim borrowing, help fund Rs 3.3 lakh crore capex plan, capitalise banks and provide fiscal stimulus to some stressed sectors, experts and economists said.
The additional cash will now give the Centre more headroom for stimulating the economy.
This demand comes at a time when the government is falling short of its revenue targets due to dwindling tax and low disinvestment receipts. It could account for the dividend in the upcoming Union Budget on February 1. RBI is, however, yet to take a final call on the government's demand and might decide on this at its central board meeting scheduled for February 15 in New Delhi.
The Centre's proposal to call for governance reform in the RBI could, however, take a back seat, a source privy to the development said.
'His (Das) approach to work seems that of working as a team with ease in communication.'
The RBI was not party to the decision to demonetize 500 and 1,000-rupee notes, which was taken at the highest level of India's political leadership.
A staunch defender of demonetisation, it would be interesting to see how he handles the government's increasing demand for more cash from the RBI, and letting some weak banks get out of prompt corrective action.
The career bureaucrat-turned-central banker walked into the 19th floor corner room of the Reserve Bank on December 12, 2018. Since February 2019, the Das-led RBI has cut the repo rate by a whopping 135 basis points to support the sagging growth, including an unprecedented 35 bps reduction in August. As he completes one year at the helm, woes in the NBFC sector, overall health of the banking sector and steeply falling economic growth are among the major challenges that needs to be tackled sooner than later.
Chief Economic Advisor Arvind Subramanian's interview.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances