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RBI's surplus transfer to Centre
Why is it in news?
- The board of the Reserve Bank of India (RBI) has approved the transfer of ₹57,128 crore as surplus to the government for the accounting year 2019-20.
- The board decided to maintain the Contingency Risk Buffer at 5.5%.
Details:
- Last year, the central bank had transferred ₹76 lakh crore.
- Out of ₹76 lakh crore, about ₹1.23 lakh crore were dividend and ₹52,637 crore were excess provisions.
- The Board discussed a proposal for setting up an Innovation Hub and also approved the Annual Report.
Surplus Funds:
- The 'Surplus funds' is the amount RBI transfers to the government after meeting its own expenses.
- This surplus is basically RBI's income which it earns through interest on securities it holds.
- RBI also transfers a portion of its earnings into the Contingency Fund(CF).
Financial year:
- RBI’s financial year runs from July-June at present and is scheduled to be harmonised with the government’s April-March fiscal starting FY22.
- In the current year, the RBI will have a nine-month financial year, ending in March.