Published 23:02 IST, March 23rd 2020
RBI changes accounting year to July 2020-Mar 2021 to match Centre's fiscal year in FY22
Matching the RBI's accounting year with the Centre's fiscal year, the Central bank - Reserve Bank of India (RBI) decided to cut short its next accounting year
Matching the RBI's accounting year with the Centre's fiscal year, the Central bank - Reserve Bank of India (RBI) on Saturday, decided to cut short its next accounting year from July 31, 2020, to March 31, 2021. Currently, the RBI's accounting year spans from July to June. With the decrease in FY 20-21, next year, the RBI's accounting year will match with the Centre's fiscal year (April 2021 - March 2022).
RBI matches Centre's fiscal year
Previously in February, after the post-budget meet RBI governor, Shaktikanta Das said that the move was in consideration. This aligning was recommended by the Bimal Jalan panel set up to review the economic capital framework of the central bank. The panel had recommended both accounting years should be in sync beginning 2020-21.
Bimal Jalan panel suggests
“The RBI would be able to provide better estimates of the projected surplus transfers to the government for the financial year for budgeting purposes," the Jalan panel had said. It also said that the alignment of accounting years could reduce the need for the payout of an interim dividend by the RBI. The panel had recommended that with the alignment, the payment of an interim dividend may then be restricted to extraordinary circumstances.
RBI injects liquidity amid Coronavirus outbreak
To enable domestic liquidity amid volatile markets with the slump in global trade, the RBI on Monday, announced large liquidity injections via repo window under the Liquidity Adjustment Facility. The central bank stated that it will offer Rs 1 lakh crore to all banks via repo operations. The LTRO will be held in two tranches of Rs 50,000 crores each on March 23 and the remaining on Tuesday.
The RBI has also conducted another 6 months US dollar sell-buy swap on Monday to provide liquidity to the Foreign Exchange market. The central bank will purchase Rs 15,000 crore in government bonds on March 24 and on March 26 as well. On Monday, the markets continued their freefall with Sensex plummetted 3,935 points, closing at 25,981.24 while the Nifty fell 1,135.20 points to settle at 7,610.25.
Updated 23:02 IST, March 23rd 2020