INSUBCONTINENT EXCLUSIVE:
into the size of capital reserve that the Reserve Bank of India should hold, may recommend transfer of Rs 50,000 crore to the Centre from
The panel will submit its report this week to the RBI.Sources said the RBI is likely to suggest about sub-lakh crore of transfers from the
contingency reserves that can be done as per a formula arrived at by the ECF panel members and this amount is likely to be Rs 50,000
(22,811 crore), Currency and Gold Revaluation Account (Rs 6.91 lakh crore) and Investment revaluation Account Re-Securities (13,285 crore)
and this adds to Rs 9.59 lakh crore.While the Centre is keen on the entire contingency fund -- Rs 2.32 lakh crore, the Jalan panel is not
government feels that through transfer to contingency reserves and other funds, the RBI has more than adequate capital.While speculations
were that the Centre is keen on one-third of the total reserves of the Rs 9.6 lakh crore, last year the government had said that there is no
proposal to ask RBI to transfer Rs 3.6 (lakh crore) or Rs 1 lakh crore.Despite government's denial, the matter stay as is
Officials said "Currently, the RBI's capital needs put its provisioning at 27 per cent, while most central banks have theirs at 14 per cent
Our calculations state that if the RBI provisions at 14 per cent, it can free up to Rs 3.6 lakh crore," a top official said."The forex
reserves and asset revaluation reserves for the domestic bonds are encumbered
The government cannot touch them
As they have been arrived at with reference to value at which the particular asset was created in the books of RBI and consequently whatever
depreciation or appreciation takes place and benefits take place, you provide it in the reserves
So, when that same thing reverses later, you pay it later from the reserves," said a former banking secretary.Another former RBI Board
member said legally the RBI cannot part with its reserves
It can only part with a particular year's profits with the government
Only the contingency reserves are being discussed for transfer to the government.Get Breaking news, live coverage, and Latest News from
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