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Bimal Jalan panel on use of RBI reserves may submit report in August

The panel is likely to suggest a phased transfer of the RBI's excess funds to the government.

August 05, 2019 / 08:43 PM IST

The Bimal Jalan-led panel on economic capital framework (ECF) is expected to meet again this month, senior government officials said.

"The panel might submit the report to the RBI (Reserve Bank of India) this month. Three, four minor issues would be discussed over the next few days," the officials said.

Any surplus would be transferred to the government over a period of five years, one of the officials said.

The panel is looking into the size of capital reserves that the RBI should hold.

The committee on ECF was set up by the central bank in December 2018 and was expected to submit its report within 90 days from the date of its first meeting.

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Besides Jalan, Finance Secretary Rajiv Kumar, former RBI Deputy Governor Rakesh Mohan, directors of RBI's central board Bharat Doshi and Sudhir Makand, and RBI Deputy Governor NS Vishwanathan are part of the panel. Former Finance Secretary Subhash Chandra Garg was also part of the panel.

The panel was formed after the government and the central bank disagreed on the issue of transfer of RBI’s surplus funds to the government.

While most panel members were in favour of a phased transfer of reserves to the government over the years, then Finance Secretary Garg suggested a one-time transfer.

"The panel is yet to take a call on former finance secretary's dissent note," one of the officials said, on being asked if it would be a part of the report.

The controversy over the transfer of surplus reserves started when it was reported that the government was seeking Rs 3.6 lakh crore from RBI.

The government then said that it was only discussing a proposal to fix an appropriate "economic" capital framework for the central bank.
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