RBI balance sheet must be strong, says Bimal Jalan committee report

To maintain resilience, the committee suggested a relatively smaller transfer than what was anticipated.

The Reserve Bank of India’s (RBI’s) balance sheet should be strong enough to support banks if there is a need to recapitalise them during a financial crisis, said the report of the committee to review the economic capital framework (ECF) of the central bank.
 
India, with one the lowest sovereign ratings, and not having a reserve currency to boot, should not think that risky actions by the government would still be as safe as advanced economies, said the panel headed by former RBI governor Bimal Jalan.
 
“The fact that ELA (emergency liquidity assistance) operations by the AE (advanced