Mumbai : The Reserve Bank Of India has approved a Rs 99,122 crore dividend payout to the government for an accounting period of nine months ended in March 31, 2021 ( July 2020 – March 2021 )
The Reserve Bank will transfer a surplus of Rs 99,122 crore to the government for the nine months ended March 31 , 2021 , the central bank said in a press release on Friday ..The dividend which government had announced for FY21 in February in its budget was expected to be 53,510 crore . But the dividend is much higher than what government has expected. Moreover the amount is more than 73% higher than previous years dividend, which was of Rs 57,128 crore. The period is still of nine months only ,due to change in accounting year to April – March .The surplus transfer is the highest since 2018 -19 , when the central bank had transferred Rs . 1.75 lakh crore , which included a one time payout on account of a change in the RBI ‘s Economic Capital Framework, so this divided of 99,122 crore is also highest after FY19’s dividend .
In the 589th meeting of the central Board of Directors of Reserve Bank of India was held on Friday under the chairmanship of Shri Shaktikanta Das ,Governor , through video conferencing. And in this meeting it was decided to transfer this money .
Earlier RBI was formed as a private shareholder bank in 1935 . But government nationalised RBI in January 1949 and thus government became the sole owner .Thus in accordance with Section 47 (allocation of surplus profits ) of the Reserve Bank Of India , Act 1934 , RBI transfers the surplus to government
The surplus of Rs 99,122 crore was decided on while holding the contingency risk buffer at 5.5 % the RBI said after a meeting of central bank
In FY21 , the RBI would have earned income from a larger amount of open market operations as bond purchases by the central bank raises the amount of Interest it earns . Larger foreign exchange reserves also add to its earning . Liquidity bank operations also added to the earning . A wider spread between the reverse repo rate ( which RBI pays banks who parks funds With it ) and the repo rate (at which banks borrow from the RBI ) would also be a factor in this year’s surplus .
The higher transfer will come to the aid of government finances . Moreover high commodity prices at a time when demand and pricing power are subdued , would dent the margins of corporates in many sectors , compressing the growth in direct tax collection.