India: RBI to pay INR280bn as interim dividend to government

  • The Reserve Bank of India (RBI) will pay INR280bn as interim dividend to the government, which will help the Centre meet its revised budget estimates that include an allocation for the first-ever income transfer to farmers and burnish its fiscal credentials ahead of the general elections.
  • The central bank follows a July-June financial year and usually distributes the dividend in August after annual accounts are finalised. With this interim transfer, the government will get a total INR680bn from the central bank in the current fiscal. The RBI had transferred INR400bn to the government in Aug 18.
  • This will be the highest receipt from RBI in a single financial year for the government, exceeding the INR659bn it received in FY16 and INR407bn in FY18.
  • RBI had internally informed the government about the quantum of the interim dividend, which was factored in the revised estimates for FY19 presented in the interim budget.
  • The budget had factored in some sort of interim dividend from the RBI. In the revised estimate for FY19, the government budgeted INR741bn from dividends and surpluses of RBI, nationalised banks and financial institutions.
  • The RBI decides independently on the quantum of interim dividend to be paid to the Centre and a central bank committee is currently examining the issue, the government said.
  • Finance Minister Arun Jaitley said it was the prerogative of the central bank to decide the quantum of RBI’s interim dividend to be paid to the government.

External Link: https://economictimes.indiatimes.com/news/economy/finance/rbi-to-pay-rs-28000-crore-as-interim-dividend-to-government/articleshow/68050269.cms

External Link: https://economictimes.indiatimes.com/news/economy/policy/no-rbi-decision-yet-on-interim-dividend-quantum-to-be-paid-to-government/articleshow/68046699.cms

19-Feb-2019


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