Mumbai: In a major windfall for the Government, the Reserve Bank of India (RBI) today approved transfer of about Rs 2.11 lakh crore as “surplus” to the Central government for the accounting year 2023-24, far higher than the expectation.
During accounting years 2018-19 to 2021-22, owing to the prevailing macroeconomic conditions and the onslaught of Covid-19 pandemic, the Board had decided to maintain the Contingent Risk Buffer (CRB) at 5.50 per cent of the Reserve Bank’s Balance Sheet size to support growth and overall economic activity.
With the revival in economic growth in FY 2022-23, the CRB was increased to 6.00 per cent. As the economy remains robust and resilient, the Board has decided to increase the CRB to 6.50 per cent for FY 2023-24. The Board thereafter approved the transfer of Rs 2,10,874 crore as surplus to the Central Government for the accounting year 2023-24.
This will help the Central government to continue with its social welfare schemes as have been announced in the wake of Lok Sabha polls.
The transferable surplus for the year (2023-24) has been arrived at on the basis of the Economic Capital Framework (ECF) adopted by the Reserve Bank on August 26, 2019 as per recommendations of the Expert Committee to Review the extant Economic Capital Framework of the Reserve Bank of India (Chairman Dr. Bimal Jalan).
The Committee had recommended that the risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 6.5 to 5.5 per cent of the RBI’s balance sheet.
There was expectation that RBI would transfer surplus of up to Rs 1 lakh crore but the actual figure has far exceeded the expectation.
This decision was taken at the 608th meeting of the Central Board of Directors of Reserve Bank of India which was held at Mumbai today under the Chairmanship of Governor Shaktikanta Das.