Jalan panel defers report on RBI surplus funds after lack of consensus

A Reserve Bank of India (RBI) committee considering guidelines for transfer of the central bank's surplus funds to the government delayed submitting its report Wednesday, after lack of consensus, officials said.

The six-member committee led by former RBI governor Bimal Jalan will met once more before submitting its report by the month-end. 

The committee was appointed in December 2018 to review the Economic Capital Framework (ECF) for the Reserve Bank after the Finance Ministry advised the central bank to transfer surplus funds to the government. The RBI has over Rs 9.6 lakh crore surplus capital.

"There may be differences of opinion, but that is being discussed," said an official about delay in finalising the report.

The ECF panel was mandated to submit its report to the RBI within 90 days of its first meeting which took place on January 8. Following this, the panel was given a three-month extension.

The other key members of the panel include Rakesh Mohan, former deputy governor of RBI as the vice-chairman, finance secretary Subhash Chandra Garg, RBI deputy governor N S Vishwanathan, and two RBI central board members -- Bharat Doshi and Sudhir Mankad. 

The panel has been entrusted with the task of reviewing the best practices followed by central banks worldwide in making assessment and provisions for risks.

The government and the RBI under its previous governor Urjit Patel had been at loggerheads over the Rs 9.6 lakh crore surplus capital with the central bank.

The finance ministry was of the view that the buffer of 28 per cent of gross assets maintained by the central bank is well above the global norm of around 14 per cent. Following this, the RBI board in its meeting on November 19, 2018, decided to constitute a panel to examine Economic Capital Framework.