RBI to transfer Rs 28,000 cr interim surplus to government

The Reserve Bank of India (RBI) in its board meeting on February 18 decided to transfer Rs 28,000 crore as interim dividend to the government for the period of July to December 2018.

“Based on a limited audit review and after applying the extant economic capital framework, the Board decided to transfer an interim surplus of Rs 280 billion to the central government for the half-year ended December 31, 2018,” the RBI said in its statement.

The interim surplus has been decided after a limited audit review and after applying the Economic Capital Framework.

This is the second successive year that RBI will transfer interim surplus to the government.

Transfer of interim surplus would help the government finance various policy initiatives that were announced during interim Budget and will help to manage its fiscal position.

Government had announced key populous decisions during the Budget presentation, ahead of Lok Sabha elections in May 2019, including direct annual income transfer of Rs 6,000 to farmers in three equal instalments and exemption of income tax for individuals with taxable income less than Rs 5 lakh per annum.

Experts believe that Budget announcements and transfer of interim dividend will lead to enhanced liquidity in the system.

Earlier, Finance Minister Arun Jaitley addressed the post-Budget meeting of the Central Board and discussed various “issues related to fiscal policy decisions taken by the government”.

With this surplus transfer, the total dividend payout by the RBI to the government in FY19 stands at Rs 68,000 crore. The RBI follows the July-June fiscal calendar.
According to a written reply by Finance Ministry in Rajya Sabha on February 12, the RBI transferred Rs 40,000 crore in August 2018 as excess surplus to the government.

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