RBI has insufficient capital, much less surplus to hand over to government

The paper's findings rekindle the debate on the Reserve Bank of India's autonomy, just as a panel reviews how much funds the monetary authority should hold

India’s central bank has insufficient capital, much less a surplus to hand over to the government, a new study shows.

Operating losses could push the RBI to seek financial assistance from the government, compromising its autonomy, wrote the authors, led by Amartya Lahiri, director at Mumbai-based think tank Centre for Advanced Financial Research and Learning and a professor at the University of British Columbia.

The study, which covered balance sheets of 45 central banks, found the global average capital to asset ratio -- net of revaluation capital -- was 6.56 percent. The level for those in emerging economies was 6.96 percent, with