Reserve Bank of India’s board on Friday approved transfer of Rs 87,416 crore as dividend to government for FY23.
The decision was taken at the 602nd meeting of the Central Board of Directors of Reserve Bank of India held on Friday at Mumbai under the Chairmanship of Governor Shaktikanta Das.
Read also:- SUMMARY OF THE ECONOMIC SURVEY 2022-23
“The Board in its meeting reviewed the global and domestic economic situation and associated challenges including the impact of current global geopolitical developments. The Board approved the transfer of Rs 87,416 crore as surplus to the Central Government for the accounting year 2022-23, while deciding to keep the Contingency Risk Buffer at 6%,” said RBI in a statement.
In February, the government said it expects 17% higher dividend at Rs. 48,000 crore from the Reserve Bank of India (RBI), public sector banks and financial institutions in 2023-24.
Read also:- National Medical Devices Policy
Madan Sabnavis, chief economist of Bank of Baroda said that this surplus transfer will come in very handy and ensure that the government managed it fiscal numbers with relative ease given that there are question marks on the divestment programme.
“The Budget had looked at a number of Rs 48,000 crore as dividend from banks and RBI. RBI has overshot this number with the transfer of Rs. 87,000 cr.
This was enabled by higher earnings on sale of forex during the year, better returns on forex investments in US treasuries (though value of bonds would have fallen which has to be charged to the contingency reserve), revaluation of forex assets and adjustments in reserves as per the Bimal Jalan Committee recommendations.
The RBI would have had higher pay-outs due to the higher SDF rates with the system being in surplus all through the year,” Sabnavis said.
Impact of Global and Domestic Economic Situation:
During its meeting, the RBI’s board reviewed the global and domestic economic situation, including the influence of current geopolitical developments. The central bank acknowledged the associated challenges and deliberated on its performance during the accounting year 2022-23. The approval of the Annual Report and accounts of the RBI for this period reflects the board’s confidence in the bank’s operations. Furthermore, the decision to maintain the contingency risk buffer at 6% demonstrates the RBI’s commitment to prudential financial management.
Read also:- Earth – Latitudes & Longitudes
RBI approves transfer of Rs. 87,416 crore as dividend to govt for FY23
