Bimal Jalan panel, which is looking into the size of capital reserve that the Reserve Bank of India (RBI) holds, has finalised the report on Economic Capital Framework (ECF).
Bimal Jalan panel, which is looking into the size of capital reserve that the Reserve Bank of India (RBI) holds, has finalised the report on Economic Capital Framework (ECF), PTI reported citing unidentified sources. The final report would be submitted in the coming 10-15 days. The six-member committee report is not expected to be unanimous, CNBC TV18 reported after the meeting concluded. The RBI surplus reserves would be transferred to government in tranches in 3-5 years, it said, adding the periodic reviews of ECF would follow after each cycle.
The panel was originally supposed to submit the report in April, but it was delayed due to a lack of consensus. The panel headed by former RBI Governor Bimla Jalan was appointed on December 26, 2018 and was entrusted to evaluate the RBI’s capital reserves. The central bank holds a surplus of capital of over Rs 9.6 lakh crore.
There were reports in the media that the panel members including the government’s representative on the panel, Economic Secretary SC Garg are divided over the issue of the ‘excess’ capital reserves. While government wants it to be a one-time transfer, the other members are of the opinion that that cash reserves should be transferred in a phased manner.
Bimal Jalan panel has for the last three occasions deferred the submission deadline. The committee was asked to submit the report in the 90 days from its first meeting held on January 8. The panel received a three-month extension after this. It again deferred its deadline until after the Budget.
Meanwhile, the issue over RBI’s excess reserves has already been reviewed by three committees — V Subrahmanyam in 1997, Usha Thorat in 2004 and YH Malegam as late as in 2013.