RBI should cut buffer capital, free up cash for dividend hike: Top official

The RBI calculates its capital needs based on 'stressed value-at-risk' valuations, while the government wants the central bank to use the 'value-at-risk' figure

The finance ministry will not compromise on seeking excess capital from the Reserve Bank of India (RBI) and it will press it to adopt a new dividend policy when the central bank's board meets on November 19, top government sources have told Business Standard.

 
The finance ministry seeks Rs 3.6 trillion from the central bank, but it is open to negotiating the additional surplus RBI pays apart from regular dividends.
 
“What we are asking from the RBI is to have a new policy in place for dividends and capital reserves. Currently, the RBI’s capital needs put its provisioning at