RBI to pay Rs 28,000 crore as interim dividend to govt

New Delhi: The Reserve Bank of India (RBI) today decided to transfer Rs 28,000 crore to the Centre, hours after its chief Shaktikanta Das said any such decision would be taken after finalising a report on the contentious issue by a committee headed by Bimal Jalan.

“Based on a limited audit review, and after applying the extant economic capital framework, the board (of RBI) decided to transfer an interim surplus of Rs 28,000 crore to the Central Government for the half year ended December 31, 2018,” read an RBI statement.

Earlier in the day, when asked about the issue, Union Finance Minister Arun Jaitley said the onus was entirely on the RBI. The issue was one of the reasons that precipitated the resignation of previous RBI Governor Urijit Patel.

The RBI has already transferred Rs 40,000 crore as interim dividend and was facing a demand from the government for an additional Rs 28,000 crore that would be used to meet the promises made in the Interim Budge, without breaching the promised ceiling for the fiscal deficit.

The government argues that the RBI need not keep such a big amount as reserve for contingencies and should instead use the money to create demand in the economy.

(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)