Bimal Jalan panel suggests RBI transfer funds in tranches to government

The Bimal Jalan-led panel on the economic capital framework (ECF) has suggested RBI transfer of funds in tranches to the government over 3-5 years, a senior government official said on July 17.

The official also said that no further meeting of the panel is expected to take place.

"There are differences in the panel and the report reflects those differences. The panel has, however, finalised its report on ECF. The report will be submitted to RBI very soon," the official said.

When asked about the quantum of transfer, the official said: "Quantum cannot be disclosed."

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. Garg, Bimal Jalan, former RBI Deputy Governer Rakesh Mohan, directors of RBI's central board Bharat Doshi and Sudhir Makand, and RBI Deputy Governor NS Vishwanathan are part of the panel.

The panel was formed at a time when the government and the central bank were involved in differences of opinion on the issue of RBI’s surplus transfer to the government.

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.