Potential windfall: RBI's panel finalises report, suggests transfer of massive surplus in tranches over 3-5 years 

Bimal Jalan committee, constituted to assess equate size of capital reserves that RBI should hold, has finalised its report, sources said on Wednesday.

panel's term was extended after transfer of former Ecomic Affairs Secretary Subhash Chandra Garg to Power Ministry.

transfer took place when panel was in midst of finalising report. vacancy was filled by newly appoint Finance Secretary Rajiv Kumar for finalisation of report. According to sources, recommendations have been "more or less" finalised and re will t be ar meeting.

"We have discussed everything. w it is final report. It would be difficult to tell what is exact amount of transfer or calculation. Transfer would be in phased manner as is practice," sources said.

report would be submitted to RBI in next few days, y ded.

six-member panel, under former RBI Goverr Jalan was appointed on December 26, 2018, to review ecomic capital framework (ECF) for Reserve Bank of India (RBI) after finance ministry wanted central bank to follow global best practices and transfer more surplus to government.

As per various estimates, RBI has over Rs 9 lakh crore of surplus capital with it. surplus capital transfer would help government meet its fiscal deficit target as it will come as a windfall to exchequer.

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government has set a fiscal deficit target of 3.3 per cent of gross domestic product (GDP) for current fiscal, revised downward from 3.4 per cent pegged in Union Budget for 2019-20.

Besides surplus capital transfer, government is expecting Rs 90,000 crore dividend from RBI in current financial year as against Rs 68,000 crore received last fiscal.

or key members of committee include Rakesh Mohan, former deputy goverr of RBI, as vice-chairman; Finance Secretary Rajiv Kumar; RBI Deputy Goverr N S Vishwanathan; and two RBI central board members -- Bharat Doshi and Sudhir Mank.

government and RBI under previous goverr Urjit Patel h been at loggerhes over Rs 9-lakh crore surplus capital with central bank.

finance ministry was of view that buffer of 28 per cent of gross assets maintained by RBI is well above global rm of around 14 per cent. Following this, RBI board in its meeting on vember 19, 2018, decided to constitute a panel to examine ECF.

In past, issue of ideal size of Reserve Bank of India reserves was examined by three committees -- V Subrahmanyam in 1997, Usha Thorat in 2004 and Y H Malegam in 2013.

While Subrahmanyam panel recommended for building a 12 per cent contingency reserve, Thorat panel suggested it should be maintained at a higher 18 per cent of total assets of central bank.

RBI board did t accept recommendation of Thorat committee and decided to continue with recommendation of Subrahmanyam committee. Malegam panel said RBI should transfer an equate amount of its profit to contingency reserves annually but did t ascribe any particular number.

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