INSUBCONTINENT EXCLUSIVE:
billion) as interim dividend, according to a statement
ahead of a national vote due by May.
The government needs cash after allocating 200 billion rupees toward the first installment of the $10.5
billion program by March 31
The cash support -- handing about 120 million farmers with up to 2 hectares (4.9 acres) three payments of 2,000 rupees per year -- was
goal of 3.4 percent of gross domestic product for the current fiscal year
to part with a greater share of its capital has been a contentious issue between the central bank and the government
It resulted in a public standoff last year and is seen as one of the reasons for the abrupt exit of then Governor Urjit Patel.
The finance
ministry has also asked the central bank to transfer about 270 billion rupees of surplus capital withheld by it in the previous two
Separately, finance ministry officials estimate the RBI has at least 3.6 trillion rupees more capital than it needs, which they say can be
used to help bolster weak Indian banks.
However, a recent study by the Centre for Advanced Financial Research and Learning, a Mumbai-based
think tank, showed the central bank has insufficient capital, and much less a surplus to hand over to the government.
