New Delhi, June 12 : The Bimal Jalan-led committee tasked to make recommendations on the RBI's Economic Capital Framework (ECF) regarding the central bank's reserves, will meet once again this month and hopes submit its report by end of June, panel Chairman Bimal Jalan said on Wednesday.
Official sources said that at the committe meeting earlier in the day, differences among panel members on the key issue of the RBI's surplus reserves may have delayed a decision and there may be some convergence by the next meeting.
"The report is still not final and there will be one more meeting over this. We will hopefully submit the report by the end of this month," Jalan told reporters here after the meeting.
The Reserve Bank of India (RBI) had set up a panel last December under the chairmanship of Jalan, a former RBI Governor, to review its economic capital framework. The terms of re ference of the panel included reviewing the status and need for various reserves and buffers held by the RBI.
The six-member panel has former RBI Deputy Governor Rakesh Mohan as its Vice-Chairman and includes Economic Affairs Secretary Subhash Chandra Garg, RBI central board members Bharat Doshi and Sudhir Mankad, and RBI Deputy Governor N.S. Vishwanathan.
The sources add some members of the panel are in favour of RBI lowering its excess reserves in a phased manner but not transfer funds to the government, which proposal has obvoiusly met with opposition from the government representatives.
The Centre believes the accumulated excess reserves should be transferred to the government as RBI is part of the government.
According to the Finance Ministry, the existing economic capital framework which governs the central bank's capital requirements and terms for the transfer of its reserves to the government is based on a very "conservative" risk assessment by the RBI.
At the heart of the RBI-government tussle towards the end of former RBI Governor Urjit Patel's term was a proposal by the Finance Ministry seeking to transfer to the exchequer a surplus of Rs 3.6 lakh crore, amounting to more than a third of the total Rs 9.59 lakh crore reserves of the central bank.
As per Section 47 of the RBI Act, the central bank must pay to the government any profit remaining after making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds, as well as for all other matters for which provision is to be made.
In its last two fiscals, RBI has transferred a total of Rs 27,330 crore to the Contingency Fund. As on June 30 last year, the Contingency Fund stood at Rs 2.32 l akh crore.
Due to the additions to the Contingency Fund as well as other extraordinary expenditures, such as those related to demonetisation, the RBI has transferred a lower amount as surplus to the government.
For 2016-17 (July-June), the RBI transferred Rs 30,659 crore, which was 50 per cent lower than the record su rplus of Rs 65,876 crore transferred the previous year.
For the 12 months ended June, the surplus transferred was Rs 50,00 crore