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Utilising RBI's revaluation balances a moral hazard: Bimal Jalan panel

The committee said it will become a precedent for using rupee depreciation to fund fiscal expenditure

Former RBI governor Bimal Jalan

Former RBI governor Bimal Jalan

Somesh Jha New Delhi
The Bimal Jalan committee, reviewing the Reserve Bank of India (RBI)’s economic capital framework, has advised exercising caution in the government drawing funds out of the central bank’s revaluation accounts. 

Revaluation balances, accounting for 73 per cent of the RBI’s economic capital, was a key flashpoint between the central government and the central bank last year when former finance secretary Subhash Chandra Garg had suggested drawing funds from it. 

“Revaluation balances held by commercial entities can be monetised by selling the assets in case of need. This option may not, however, be open to central banks. The RBI transferring ‘what it has

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First Published: Aug 28 2019 | 6:50 PM IST

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