RBI approves a record Rs 1.76 trillion surplus transfer to government

The surplus transfer, commonly called as “dividend” to the government, is almost double of the previous record of Rs 65,896 crore

The Reserve Bank of India (RBI) on Monday decided to transfer a record Rs 1,23,414 crore of its surplus to the central government for the fiscal year 2018-19 or FY19 (July to June), and an additional Rs 52,637 crore of excess provisions as recommended by the Bimal Jalan committee on Economic Capital Framework (ECF).

The surplus transfer, commonly called “dividend”, is almost double the previous record of Rs 65,896 crore. In the previous year, the RBI transferred Rs 50,000 crore, while in 2016-17, the dividend was only Rs 30,659 crore because of demonetisation.

Of the total, Rs 28,000 crore has already been transferred to the government as interim dividend. The ECF, headed by former RBI governor Bimal Jalan, and with former deputy governor Rakesh Mohan as vice-chairman, suggested a much smaller transfer.

Some analysts were expecting the committee would recommend a transfer of at least Rs 3 trillion from RBI’s reserves — Rs 1 trillion from contingency reserves and Rs 2 trillion from revaluation reserves…