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Tuesday, June 25, 2024

RBI to transfer Rs.87,416 crore ‘surplus money made in FY22 to centre : government to decide where this extra cash will be used.

The Reserve Bank of India’s board Friday approved the transfer of Rs 87,416 crore as surplus to the Central government. It also decided to raise the contingency risk buffer to 6% from 5.5%, the central bank said in a press release.

In FY22, the RBI transferred Rs 30,307 crore to the government.

The decision was made today, at the 602nd meeting of the RBI’s Central Board of Directors, chaired by Governor Shaktikanta Das.

“The board approved the transfer of ₹87,416 crore as surplus to the central government for accounting year 2022-23, while deciding to keep the Contingency Risk Buffer at 6%,” the RBI said.

The surplus transfer was expected to exceed budget estimates due to profits from large dollar sales and higher interest income on treasury holdings, according to analysts.

A higher dividend payout is expected to help Prime Minister Narendra Modi’s government to meet its target of lowering the fiscal deficit to 5.9% of gross domestic product in the current financial year from 6.4% a year ago.

The RBI’s Central Board, in its meeting, reviewed the global and domestic economic situation and associated challenges including the impact of current global geopolitical developments, per an RBI statement. The board also discussed the working of the Reserve Bank during FY23 and approved the annual report and accounts for the accounting year 2022-23.

For the unversed, RBI provides the government with an annual payout derived from surplus income.The surplus income comes from investments and valuation changes on foreign exchange holdings, including the dollar. and the RBI also earns fees from printing currency notes, contributing to the payout.

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