RBI bank to Transfer 1.76 lakh crore Contingency Fund to Government

RBI Bank

RBI Bank: Since independence, this is for the first time the government has asked RBI to transfer this amount. Before this RBI use to transfer funds but this time amount is very big and had not transferred before. In the budget, RBI was asked to provide 90,000 crores. But after the recommendations of Bimal Jalan committee, RBI transferred 1.76 lakh crore.

Government has been soliciting almost 3.60 lakh crore since last yea. But because of disapproval by former RBI governor, they had to set up the committee. Many also think because of the same issue former RBI governor Urjit Patel resigned. And deputy governor Viral Acharya also before their tenure culmination.

Under the guidance of former governor of RBI, Bimal Jalan, the government set up a committee on the economic capital framework. As per his recommendations, RBI balance sheet needs to maintain in the range of 6.5 % – 5.5 % reserves. RBI bank selected the 5.5% range. Before this RBI uses to keep reserve up to 6.8%.

Right now RBI has 9.56 lakh crore of the surplus reserve.

Now that RBI has decided to transfer the fund it is expected that government will utilize it in a proper way.

Yesterday in Press briefing Finance Minister Nirmala Sitharaman stated that government will not tell what they will do with this amount.

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