Explained: Where do the RBI’s earnings come from?
5 years, 4 months ago

Explained: Where do the RBI’s earnings come from?

The Hindu  

The story so far: On August 26, the Reserve Bank of India central board decided to transfer ₹1.76 lakh crore to the government, a move that is likely to address the Central government’s precarious fiscal situation. The massive payout has raised concerns that the government may be confiscating money from the RBI to meet its urgent spending needs, thus effectively turning the central bank into a banker for the government. The increased demand to meet the government’s fiscal needs will thus compromise the RBI’s ability to fulfil its primary mandate — to preserve the value of the rupee by reining in inflation, by retaining full and final control over the supply of rupees in the wider economy. The RBI’s transfer of surplus funds to the government could thus effectively turn into a monetary stimulus for the economy which has been slowing down for several consecutive quarters now. Former RBI Deputy Governor, Viral Acharya, warned in a speech last year that governments that do not respect the independence of the central bank will eventually be punished by financial markets.

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History of this topic

DC Edit | RBI’s booster shot to economy
7 months, 2 weeks ago

DC Edit | RBI’s booster shot to economy

Deccan Chronicle  

The Reserve Bank of India transferred a whopping amount of Rs 2.1 lakh crores to the Central government as a dividend payout, giving a booster shot to volatile stock markets. The current payout is 141 per cent higher than the ₹87,416 crores that the RBI had given the Central government last year and is Rs 1.1 lakh crores more than …

Welcome bounty: On the RBI’s ₹2.11-lakh-crore transfer to the Union government
7 months, 2 weeks ago

Welcome bounty: On the RBI’s ₹2.11-lakh-crore transfer to the Union government

The Hindu  

The decision by the Reserve Bank of India’s board to transfer a record surplus of almost ₹2.11 lakh crore to the Union government for 2023-24 will serve as a welcome shot in the arm for the new government when it presents its Budget in July. More than double the previous year’s ₹87,416 crore payout as well as the ₹1.02 lakh …

RBI To Pay Record Rs 2.11 Lakh Crore Dividend to Government
7 months, 2 weeks ago

RBI To Pay Record Rs 2.11 Lakh Crore Dividend to Government

Deccan Chronicle  

Mumbai: The Reserve Bank of India's board on Wednesday approved the transfer of record Rs 2.11 lakh crore as dividend to the Central government for accounting year 2023-2024. This is the highest ever surplus paid by the central bank to the government and is a 141 per cent jump from Rs 87420 crore dividend paid in the financial year ended …

RBI board approves transfer of ₹2,10,874 crore surplus to Centre for FY24
7 months, 2 weeks ago

RBI board approves transfer of ₹2,10,874 crore surplus to Centre for FY24

The Hindu  

In a windfall gain for the Centre, the Central Board of Directors of the Reserve Bank of India on Wednesday approved the transfer of a record ₹2,10,874 crore as surplus to the Union government for the accounting year 2023-24. “The Board also discussed the working of the Reserve Bank during the year April 2023 – March 2024 and approved the …

RBI Surplus Transfer to Govt at 44%; Lowest in Last 7 Years: Former Fin Secy SC Garg
4 years, 4 months ago

RBI Surplus Transfer to Govt at 44%; Lowest in Last 7 Years: Former Fin Secy SC Garg

News 18  

Former Finance Secretary SC Garg said on Wednesday that the RBI transferred only 44 per cent of its surplus or income to the government, which is the lowest in percentage terms in the last seven years. Earlier this month, the RBI board approved a surplus transfer of Rs 57,128 crore to the central government for Accounting Year 2019-20. In August …

RBI to transfer ₹57,128 crore surplus to Centre for FY20
4 years, 4 months ago

RBI to transfer ₹57,128 crore surplus to Centre for FY20

The Hindu  

The board of the Reserve Bank of India has approved the transfer of ₹57,128 crore as surplus to the government for the accounting year 2019-20, while deciding to maintain the Contingency Risk Buffer at 5.5%, the RBI said in a statement on Friday. “The Board reviewed the current economic situation, continued global and domestic challenges and the monetary, regulatory and …

India inflation could surge to 12% on 2nd stimulus, Rabobank says
4 years, 5 months ago

India inflation could surge to 12% on 2nd stimulus, Rabobank says

Live Mint  

India can expect inflation to surge to more than double the central bank’s target and the currency could lose a quarter of its value if the Reserve Bank of India begins printing money to fund the government’s spending. That’s according to Rabobank, which said in a report this week that India should avoid repeating the mistakes of the 1980s, when …

RBI payout may slump in disappointment for markets, fund says
4 years, 5 months ago

RBI payout may slump in disappointment for markets, fund says

Live Mint  

Bond traders pinning their hopes on a larger-than-budgeted central bank payout to Prime Minister Narendra Modi’s government may be in for a disappointment, according to Quantum Advisors Pvt. The Reserve Bank of India will probably transfer as much as ₹60,000 crore for the year to June 30, sticking with estimates unlike last year when the payment was almost double the …

Here’s What To Expect From The Rs 20 Lakh Crore Stimulus
4 years, 7 months ago

Here’s What To Expect From The Rs 20 Lakh Crore Stimulus

ABP News  

New Delhi, May 13: Finance Minister Nirmala Sitharaman to shed more details later in the day regarding the much-awaited stimulus package Rs 20-lakh crore which was announced by Prime Minister Modi to revive the beleaguered economy hit by Covid-19 outbreak Touted as "atma-nirbhar Bharat abhiyan", the combined package works out to roughly 10 per cent of the GDP. FM Minister …

RBI plays white knight to cash-strapped govt
5 years, 4 months ago

RBI plays white knight to cash-strapped govt

Deccan Chronicle  

The Reserve Bank’s decision to transfer Rs 1.76 trillion to the government as surplus follows the “golden mean” principle, often used by committees. What the committee conveniently ignored was that as of June 30, 2019 the Contingency Risk Buffer level had already increased to 6.8 per cent — see the RBI Press Note of August 26, 2019. The existing Budget …

RBI’s profit more than trebles in 2018-19 on lower expenses
5 years, 4 months ago

RBI’s profit more than trebles in 2018-19 on lower expenses

Live Mint  

Reserve Bank of India’s profit for 2018-19 more than trebles to ₹1.76 trillion owing to lower expenditure and higher other income, which has enabled a higher surplus transfer to the government. Simultaneously, other income rose nearly 20 times on a y-o-y basis to ₹86,199 crore after the central bank wrote back excess provisions from balance sheet to the profit and …

Bond income helps RBI pay record payout to government
5 years, 4 months ago

Bond income helps RBI pay record payout to government

Live Mint  

The Reserve Bank of India’s record payout to the government turns the focus back to the central bank’s profits and how it can afford such a massive transfer. Almost 70% of the 1.76 trillion-rupee disbursement — which was approved by the RBI on Monday — is derived from the income the central bank earned on its investments, likely gains from …

Why the RBI's Rs 1.76 lakh crore surplus transfer has sparked a debate
5 years, 4 months ago

Why the RBI's Rs 1.76 lakh crore surplus transfer has sparked a debate

India Today  

On August 26, the central board of the Reserve Bank of India decided to transfer a surplus of Rs 1.76 lakh crore to the government-its highest transfer ever-sparking a fierce debate. The surplus from the central bank comprised two components-Rs 1.23 lakh crore of surplus for the year 2018-19 and an additional Rs 52,637 crore of excess provisions that was …

Gains from massive bond buying helped transfer higher surplus: RBI
5 years, 4 months ago

Gains from massive bond buying helped transfer higher surplus: RBI

Live Mint  

The Reserve Bank could transfer an additional ₹1.23 trillion from its surpluses to the government, thanks to the gains from bond buying and a change in the accounting practices of its forex operations, sources said Wednesday. The higher quantum of bond buying to inject liquidity into the system has resulted in additional income of ₹36,000 crore, while the changes in …

RBI’s ₹1.76 trillion transfer to government to be balance sheet neutral
5 years, 4 months ago

RBI’s ₹1.76 trillion transfer to government to be balance sheet neutral

Live Mint  

Mumbai: The transfer of the Reserve Bank of India’s surplus to the government will not require the central bank to sell assets and won’t shrink the size of its balance sheet, a person aware of the development said. The person also said that finance secretary Rajiv Kumar, the government’s nominee on the Bimal Jalan committee, wanted RBI’s surplus, or the …

The numbers behind RBI’s ₹1.76 lakh crore payout to government: 10 points
5 years, 4 months ago

The numbers behind RBI’s ₹1.76 lakh crore payout to government: 10 points

Live Mint  

The Reserve Bank of India on Monday approved a record ₹1.76 lakh crore payout to the government, which is more than double the ₹68,000 crore that it provided the previous year. The ₹1.76 lakh crore transfer to the government includes ₹1.23 lakh crore as dividend to the government and ₹52,637 crore from its surplus capital. "Revaluation balances are highly volatile, …

Government should use RBI funds in a prudent manner
5 years, 4 months ago

Government should use RBI funds in a prudent manner

The Hindu  

After a long tug of war, the government has eventually had its way with the Reserve Bank of India, managing to get it to part with a portion of its accumulated reserves. The RBI board, on Monday, decided to transfer a massive ₹1,76,051 crore to the government, including a sum of ₹52,637 crore from its contingency reserve built over the …

Windfall from RBI to give government ammunition to fight slowdown, boost capex
5 years, 4 months ago

Windfall from RBI to give government ammunition to fight slowdown, boost capex

India TV News  

A record windfall from the RBI under Governor Shaktikanta Das to the tune of Rs 1.76 lakh crore -- higher than the aggregate dividend paid out by the central bank in previous three years -- will give the Modi government ammunition to fight an ever-widening slowdown in the economy by spurring investment and giving sectoral stimulus. Given the expected revenue …

RBI to transfer highest-ever surplus of Rs 1.76 lakh cr to govt; all you need to know about central bank's excess capital
5 years, 4 months ago

RBI to transfer highest-ever surplus of Rs 1.76 lakh cr to govt; all you need to know about central bank's excess capital

Firstpost  

The Narendra Modi government and the RBI under its previous governor Urjit Patel had been at loggerheads over the optimum level of surplus capital with the central bank. Governor Shaktikanta Das-led RBI central board on Monday 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 …

Govt appropriated 99 pc of RBI's profits since 2014: Yechury
5 years, 4 months ago

Govt appropriated 99 pc of RBI's profits since 2014: Yechury

India TV News  

CPI general secretary Sitaram Yechury hit out at the Centre on Tuesday over the record cash transfer by the RBI, alleging that the government had "appropriated" 99 per cent of the profits of India's central banking institution since 2014. The Left leader's reaction came a day after the Reserve Bank of India approved the transfer of a record Rs 1.76 …

Is RBI's Rs 1.76 lakh crore payout to govt to boost fledgling economy?
5 years, 4 months ago

Is RBI's Rs 1.76 lakh crore payout to govt to boost fledgling economy?

India Today  

The government's long-term demand for more money from RBI was fulfilled on Monday. The Reserve Bank of India transferred Rs 1.76 lakh crore, including Rs 52,600 crore of excess capital to the central government account. Where this payout comes from The windfall gain of Rs 1.76 lakh crore from RBI to the government is the outcome of framework change. Last …

Stealing from RBI won't work: Congress slams government over Rs 1.76 lakh crore surplus transfer
5 years, 4 months ago

Stealing from RBI won't work: Congress slams government over Rs 1.76 lakh crore surplus transfer

India Today  

A day after the Reserve Bank of India decided to transfer a record high surplus of Rs 1,76,051 crore to the government, the Congress party said "looting" the central bank would not help in reviving the economy. pic.twitter.com/wZQ6dqYtdi Congress August 27, 2019 "Stealing from RBI won't work - it's like stealing a Band-Aid from the dispensary & sticking it on …

RBI to transfer record surplus of Rs 1.76 lakh crore to Government of India
5 years, 4 months ago

RBI to transfer record surplus of Rs 1.76 lakh crore to Government of India

India TV News  

The Reserve Bank of India on Monday approved the transfer of record Rs 1.76 lakh crore dividend and surplus reserves to the government, boosting Prime Minister Narendra Modi-led regime's prospect to stimulate the slowing economy without widening fiscal deficit. Governor Shaktikanta Das-led RBI central board gave its nod for transferring to the government a sum of Rs 1,76,051 crore comprising …

Government’s ₹1.76 trillion RBI bonanza raises fresh stimulus hopes
5 years, 4 months ago

Government’s ₹1.76 trillion RBI bonanza raises fresh stimulus hopes

Live Mint  

The Reserve Bank of India will transfer ₹1.76 trillion to the government this fiscal, the central bank said after a board meeting. The transfer includes ₹1.23 trillion of surplus for 2018-19 and ₹52,637 crore of excess provisions identified as per the revised Economic Capital Framework adopted at the meeting, RBI said in a statement on Monday. The additional amount of …

RBI to transfer Rs 1.76 lakh crore from surplus reserve to government
5 years, 4 months ago

RBI to transfer Rs 1.76 lakh crore from surplus reserve to government

India Today  

The Reserve Bank of India on Monday approved the transfer of record Rs 1.76 lakh crore dividend and surplus reserves to the government, boosting Prime Minister Narendra Modi-led regime's prospect to stimulate the slowing economy without widening fiscal deficit. Governor Shaktikanta Das-led RBI central board gave its nod for transferring to the government a sum of Rs 1,76,051 crore comprising …

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