Mumbai, Aug 14 : The Board of Reserve Bank of India (RBI) on Friday approved the transfer of Rs 57,128 crore surplus to the Central government for FY20.
The decision was taken at the 584th meeting of the Central Board under the Chairmanship of RBI Governor Shaktikanta Das through a video conference.
The Board reviewed the current economic situation, continued global and domestic challenges and the monetary, regulatory and other measures taken by the RBI to mitigate the economic impact of Covid-19 pandemic.
The Board also approved the transfer of Rs 57,128 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.
In the last fiscal, 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.
The Reserve Bank decides on the amount of surplus or dividend transfer to the government based on its income during the period July 1 to June 30.
The RBI earns via interest income on account of open market operations (OMOs), foreign exchange (FX) gains, and writing back of excess risk provisions.
Its liabilities include issuance of notes and deposits held (CRR and reverse repos).
The transfer of surplus is expected to help government ease fiscal pressure caused due to Covid-19 pandemic and also aid it in giving the economy a boost .
In hindsight, the demand on the RBI for higher dividends and to part away wi th a greater share of its capital has been a hotly debated issue between the central bank and the government.