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RBI Panel on Economic Capital Framework

RBI Panel on Economic Capital Framework

The RBI-appointed Bimal Jalan committee, tasked with determining the capital reserves central bank should hold, has again failed to reach a consensus, leading to a significant delay in finalising the report.

The committee has now decided to meet again before submitting the final report by the June-end. The six-member panel was formed on December 26, 2018, to review the Economic Capital Framework (ECF) for the apex bank.

The committee was supposed to submit its report on April 8 but was later given a three-month extension.

A major difference of opinion is between the government's representative on the panel, Economic Secretary SC Garg, and other committee members over the transfer of "excess" capital reserves.

Apart from Jalan and Garg, other members of the panel include former deputy governor Rakesh Mohan (vice-chairman of the panel), RBI deputy governor NS Vishwanathan, and RBI central board members Bharat Doshi and Sudhir Mankad.

Surplus cash reserves with RBI

The transfer of RBI's reserves to the government has been a contentious issue between the two sides for a long time.

As of June 30, 2018, the RBI's reserves stood at Rs 9.43 lakh crore, with a major portion of the reserves coming from contingency fund (Rs 2.32-lakh crore) and currency and gold revaluation account (CGRA) (Rs 6.91-lakh crore).

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