New Delhi, July 17 (IANS) The Bimal Jalan panel on Wednesday finalised the report on RBI surplus capital and though not unanimous on the quantum of transfer, it has recommended 3-5 year formula for transfer of surplus in tranches to the government.
Sources said there will be periodic reviews of Economic Capital Framework (ECF) to follow after each cycle.
Since it is not an unanimous report, the final report – to be submitted to the RBI in 10 days – may record dissents to the recommendations made by the panel. The report has already been long delayed.
The recommended quantum to be transferred was not divulged since it is yet to be submitted.
There was dissent from the government nominee, Finance Secretary Subhash Chandra Garg, who according to sources wanted more surplus reserves to be given to the government than what was recommended by the panel.
The Bimal Jalan panel is a six-member committee appointed in December 2018 and entrusted to review the RBI’s capital reserves.
The RBI has a surplus capital of over Rs 9.6 lakh crore. The panel was formed at a time when the government and the central bank were having differences on the issue of RBI’s surplus transfer to the government.
The controversy over the transfer of surplus reserves began after reports emerged that the government was seeking Rs 3.6 lakh crore from the RBI.
The government had then said it was only keen on a formulae in tune with global practice to fix an appropriate ‘economic’ capital framework for the central bank and denied having sought Rs 3.6 lakh crore from RBI.
The Finance Ministry which is represented by the Finance Secretary in the panel is of the view that the buffer of 28 per cent of gross assets maintained by the RBI is well above the global norm of around 14 per cent.
Following this, the RBI board in its meeting on November 19, 2018, decided to constitute a panel to examine the Economic Capital Framework.