RBI Transfer of Surplus Funds – UPSC Prelims

RBI’s Transfer of Surplus to Government: 
  • RBI transfers its surplus profits to the Government according to the provisions of Section 47 of the Reserve Bank of India Act, 1934.
  • Section 47 says that surplus profits of the RBI are to be transferred to the government.
  • Surplus profit is the profit left after making various contingency provisions for bad and doubtful debts, depreciation in assets, contributions to staff, and superannuation funds, etc.
  • RBI transfer to Government for 2020-21: 
    • RBI has decided to transfer the surplus for the nine-month period of June 2020 to March 2021.
    • This was because RBI in 2020 has changed its accounting year to April-March from the earlier period of July-June.
    • Further, RBI has transferred the amount by keeping into account the Bimal Jalan Committee. The committee recommended that the RBI maintain a minimum Contingency Risk Buffer of 5.5% of its balance sheet.
  • The RBI’s transfer of Rs 99,122 Cr to the government is above the budgeted expectations. The budget had estimated to receive a surplus of about ₹50,000 crores from the RBI for 2021-22.
  • This is the second highest transfer after 2018-19.

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