RBI commits transferring Rs 99,122cr surplus to Central Govt

New Delhi: The Reserve Bank of India has announced that Rs 99,122 crore surplus amount from the apex bank's reserves will be transferred to the Union government. The surplus was the accumulated reserves of nine months ended March 31, 2021

With the expected contraction in the GST revenue due to the COVID induced restrictions and lockdowns, the transferring of the RBI surplus would be a relief for the Centre.

Announcing its plan to transfer surplus amount, the RBI said in a statement that the Board had reviewed the current economic situation, global and domestic challenges and recent policy measures taken by the Reserve Bank to mitigate the adverse impact of the second wave of Covid-19 on the economy.

"With the change in the Reserve Bank's accounting year to April-March (earlier July-June), the Board discussed the working of the Reserve Bank of India during the transition period of nine months (July 2020-March 2021) and approved the Annual Report and accounts of the Reserve Bank for the transition period," the RBI said in a statement. "The Board also approved the transfer of Rs 99,122 crore as surplus to the Central Government for the accounting period of nine months ended March 31, 2021 (July 2020-March 2021), while deciding to maintain the Contingency Risk Buffer at 5.50 per cent."

The RBI approved a Rs 1,76,000 crore ($24.8 billion) dividend payment to the government, including Rs 1,48,000 crore for FY20. It earns via interest income on account of open market operations (OMOs), foreign exchange (FX) gains, and writing back of excess risk provisions. RBI's liabilities include the issuance of notes and deposits held (CRR and reverse repos).

In the past, the demand on the RBI for higher dividends and to part with a greater share of its capital has been a hotly debated issue between the central bank and the government.