The Central Board of the Reserve Bank of India (RBI), during a meeting under the chairmanship of Governor Shaktikanta Das on Friday, approved dividend worth Rs 57,128 crore to the central government for the current financial year. The Centre had budgeted a total payout of Rs 60,000 crore from the RBI and other financial institutions. "The board 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," an RBI statement said.
The Board reviewed the current economic situation, continued global and domestic challenges and the monetary, regulatory and other measures taken by RBI to mitigate the economic impact of COVID-19 pandemic. It also discussed the proposal of setting up an Innovation Hub, an RBI statement said.
"The board discussed various areas of operations of the Bank during the last year and approved the Annual Report and accounts of the of the Reserve Bank for the year 2019-20," the statement added.
The RBI largely earns profits through its trading of currencies and government bonds. Part of these earnings are set aside by the RBI for its operational and contingency needs, while the rest is transferred to the government in the form of dividend.
In the past, the government has taken the route of seeking "interim dividend" from the RBI to balance its account. In FY19, the RBI paid Rs 28,000 crore as interim dividend. During FY18, the government received Rs 10,000 crore as interim dividend from the central bank.
Last year in August, the Shaktikanta Das-led RBI central board gave its nod for transferring to the government a sum of Rs 1,76,051 crore, comprising Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF).
The government got a higher dividend of Rs 95,414 crore during the current fiscal as against the budgetary estimate of Rs 90,000 crore.
Meanwhile, Deputy Governors BP Kanungo, Mahesh Kumar Jain and Michael Debabrata Patra and other Directors of the Central Board, including N Chandrasekaran, Ashok Gulati, Manish Sabharwal, Prasanna Kumar Mohanty, Dilip S Shanghvi, Satish K Marathe, S Gurumurthy, Revathy Iyer and Sachin Chaturvedi, attended the meeting. Tarun Bajaj, Secretary, Department of Economic Affairs, and Debasish Panda, Secretary, Department of Financial Services also took part in the meeting.