RBI board approves transfer of Rs57,128-cr surplus to govt
17 August 2020
Reserve Bank of India (RBI) has approved the transfer of Rs57,128 crore out of its surplus to government. The decision was taken at a meeting of the Central Board of RBI on Friday through video conference.
RBI Central Board while approving the transfer of surplus to the central government for the accounting year 2019-20, also decided to maintain the Contingency Risk Buffer at 5.5 per cent
"The board reviewed the current economic situation, continued global and domestic challenges and the monetary, regulatory and other measures taken by RBI to mitigate the economic impact of Covid-19 pandemic. The board discussed the proposal of setting up an Innovation Hub. The board discussed various areas of operations during last year and approved the annual report and accounts of the Reserve Bank for the year 2019-20.
“The board also approved the transfer of Rs57,128 crore as surplus to the central government for the accounting year 2019-20, while deciding to maintain the Contingency Risk Buffer at 5.5 per cent," the central bank said in an official statement.
Last year the RBI board approved a record payment of Rs1,76,000 crore to the government, which included Rs1,23,000 crore as dividend and Rs52,640 crore from its surplus capital.
The dividend from the central bank will come at a time when the central government's finances are under severe strain. The government's fiscal deficit as on June 30 touched 83.2 percent of the full year budget target of Rs7,96,000 crore, primarily on account of a sharp fall in revenues due to the nationwide lockdown, imposed to curb the spread of Covid-19.
The RBI’s income comes from the interest it receives from the purchase and sale of government securities, the interest earned from lending to banks and interest earned on holdings of bonds. The net profit is arrived at by subtracting the operational and other expenses of RBI.