Govt wants RBI to part with Rs13,000-cr risk reserve
20 November 2017
Desperate that the year's tax revenue collections may fall far short of budget estimates, the government has demanded that the Reserve Bank of India also pay the Rs13,000 crore it has kept as risk reserve after paying Rs30,659 crore as dividend for the 2016-17 financial year.
The RBI had a surplus of about Rs44,000 crore in the 2016-17 financial year ended June 2017, of which it distributed over Rs30,000 crore as dividend and retained Rs13,000 crore as risk reserve.
While the government has asked public sector undertakings to pay special dividends, it has not sought additional payouts by the central bank, only seeking the Rs13,000 crore undistributed surplus lying with it, economic affairs secretary Subhash Chandra Garg has said.
RBI had a very low surplus for the 2016-17 financial year, which reduced its dividend payout for the year to Rs30,659 crore for the fiscal, less than half the Rs65,876 crore it had paid in 2015-16.
The government had budgeted for a Rs58,000-crore dividend from the RBI in the 2017-18 fiscal year.
Besides the revenue deficit, government has committed extra spending of about Rs2,11,000 crore in the form of PSU bank recapitalisation. State-run banks grappling with the problem of mounting non-performing assets need enormous amounts to remain well capitalised.
''There is no proposal at this stage to ask for any special dividend. What is being discussed is to only ask for what the RBI earned this year but did not distribute. That is about ?13,000 crore. That's what the government has suggested the Reserve Bank to transfer,'' PTI quoted Garg as saying.
Of the Rs2,11,000 crore, Rs1,35,000 crore would be infused through recapitalisation bonds and the remaining Rs76,000 crore through budgetary support and banks diluting equity in capital market.
Although banks' bad loans soared to levels around Rs10,00,000 crore, credit rating agency Moody's last week upgraded India's sovereign rating citing the government's reform push and steps being taken to solve the high NPA problems in the banking sector.