Question of special dividend does not arise: RBI Guv Urjit Patel

Moneycontrol BureauResponding to a query on whether the Reserve Bank of India would pay a special dividend to the government from the unreturned Rs 500 and Rs 1000 currency notes, Governor Urjit Patel said the the question did not arise because cancellation of the notes did not change the nature of the central bank's balance sheet."Actually the withdrawal of legal tender characteristic does not extinguish any of the RBI's balance sheets, and therefore is no implication on the balance sheet as of now," Patel said, adding "...so that question does not arise as of now." "Not just by the withdrawal of legal tender character....no," Patel clarified on the point of a special dividen."They still carry the RBI's liability as long as only the legal tender characteristic is withdrawn," he said.The widely held view was that the central bank's liabilities would reduce to the extent of old notes that were not deposited with banks. This would have then allowed the RBI to transfer an equivalent amount to the government without increasing the money supply in the banking system. Estimates were  that the government would reap a windfall of around Rs 3 lakh crore because many people with unaccounted cash would prefer to forgo the cash rather than draw the tax authorities' attention by depositing the cash in banks.