Know the Limit of Reserve Fund in RBI; RBI Board to Discuss in Meeting

The board meeting of the Reserve Bank of India is going to be held today i.e. on Monday. It is possible to discuss the Jalan committee report in this meeting.
Know the Limit of Reserve Fund in RBI; RBI Board to Discuss in Meeting

A committee constituted under the chairmanship of former Governor of Reserve Bank of India (RBI) Bimal Jalan has submitted its report to the central bank. This report can be considered in the board meeting of RBI on Monday i.e. today. In fact, the Jalan committee was formed to suggest how much reserve fund RBI should have and how much dividend it should pay to the Central government.

According to sources, the Jalan committee has supported the transfer of RBI Reserve installments. The committee has recommended transfer of dividend of the fund to the government in a phased manner in 3 to 5 years on the basis of predefined formula. It can be published later on the RBI website. On the other hand, RBI can start transfer of the first installment of dividend this year based on the Jalan committee report.

Explain that the RBI follows the July-June financial year and dividend is often distributed in August after the annual account is finalized. For FY 2020, the government has estimated a dividend of Rs 9,000 crore from the RBI.

It is expected from the Jalan committee report that the situation of confrontation between the RBI and the central government can be ended. In fact, at the end of the tenure of former Governor Urjit Patel, there was news of increasing conflict between the RBI and the government on the issue of fund transfer.

Reserve bank of India
Reserve bank of India

After this dispute, a committee was constituted on 26 December 2018 on behalf of RBI under the chairmanship of Bimal Jalan. In this six-member committee, former deputy governor of RBI Rakesh Mohan, vice-chairman of the committee and members of the central board of RBI in the committee, Bharat Doshi, Sudhir Mankad and RBI deputy governor N. s. Vishwanathan is a member. Apart from this, Subhash Garg, who was aware of economic matters, was also included in the committee, and he was the only member who opposed the committee's decision and refused to sign it. However, he later resigned.

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