RBI Surplus To Centre Falls Sharply To Rs 30659 Crore

RBI Surplus To Centre Falls Sharply To Rs 30659 Crore

A day after the Reserve Bank of India (RBI) announced it will transfer Rs 30,659 crore as surplus to the government for the year ended June 2017, former Finance Minister P Chidambaram slammed the government's demonetisation move yet again. The government had accounted for a dividend of Rs 74,901 crore from the RBI and other financial institutions in the Union Budget for 2017-18. RBI transferred about 80% of its income as surplus in the previous three years.

The twin causes - the expenditure incurred by the central bank in printing new notes as well as in sterilising liquidity after the old Rs 500 and Rs 1,000 currency notes were scrapped in November and subsequently returned to the banking system - seem to have eaten into the RBI's surplus.

The Reserve Bank's income comprises of earnings from foreign and domestic sources, with the major portion being contributed by interest receipts, complemented by relatively small amounts of income from discount, exchange, commission, etc. The RBI's central board, which met on Thursday, approved the amount to be transferred.

His remarks came as the amount of dividend revealed by the RBI was less than half of the dividend transferred by RBI to the government a year earlier.

The dividend pay-out was less than Rs. 33,010 crore in 2012-13. Over the past two years, the RBI transferred the entire surplus generated to the government via the dividend.

The apex bank, however, did not cite any reasons for paying less dividend. This will automatically impact several welfare measures because a shortfall of Rs 35,000 crore is large, and is most likely to reflect in government spending.

Under attack from Congress for discrepancies in printing of currency notes post demonetisation, the RBI on Friday said it is following the best global practice and quality of notes are within "tolerance parameters".

"First quarter direct tax collections if continued in the fiscal will provide some buffer for central government deficit", he said.

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