Skip to main content

Panel on RBI Reserves May Meet Again

By
The high-level Bimal Jalan panel could hold another meeting before submitting its report on the Reserve Bank of India’s economic framework that will dictate how much of its surplus could be transferred to the government and when. This follows a bureaucratic reshuffle late on Wednesday evening. “We could hold another meeting as a new economic affairs secretary has been appointed,” said a person familiar with the matter. The call will be taken in some time, the person told ET. ET had reported that the recommendations of the report weren’t unanimous with Subhash Chandra Garg having dissented. Garg was transferred to the power ministry from his post as economic affairs secretary on Wednesday. The panel favoured periodic transfers of the RBI’s surplus reserves to the government over three to five years, contrary to the government’s expectation of a lumpsum payment. Any additional fund transfers from the RBI will help the government bridge its fiscal deficit as also meet other obligations. The panel held its last meeting on July 17 to finalise the recommendations. The report is now being given the finishing touches, said the person cited above. The committee was to submit the final report in 15 days to the RBI.

The six-member panel was set up in December 2018 by the RBI to review its economic capital framework (ECF) following several exchanges between the central bank and the finance ministry on the issue. The government had invoked powers under rarely used Section 7 of the RBI Act in October 2018 seeking consultations with the central bank on 12 issues including the ECF. The government wanted a substantial transfer from RBI’s ?9.6 lakh crore reserves. Most of the RBI’s income accrues from interest earned on its foreign reserves invested overseas and that on rupee securities in India. The panel has also mooted a periodic review of the economic capital framework or ECF of the central bank to decide the appropriate level of reserves for the RBI.

The Economic Times, 26th July 2019

Comments

Post a Comment

Popular posts from this blog

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more