RBI Board meeting today to finalise annual accounts, to take up Bimal Jalan committee's recommendation

The Bimal Jalan committee's recommendations on Economic Capital Framework (ECF) along with the dividend payment to the government may be taken up in the Reserve Bank of India (RBI) board meeting to be held today (Monday), sources said.The RBI board meeting will finalise its annual accounts.The committee had submitted its report to the RBI Governor on Friday. The report, which recommends transfer of surplus reserves to the government in a staggered manner over three-five years based on a predetermined formula, maybe put on the Reserve Bank of India (RBI) website later for public access, according to media reports.The RBI follows a July-June financial year and the dividend is usually distributed in August after annual accounts are finalised. For FY20, the government has pegged a Rs 9,000 crore dividend from the RBI.Sources had earlier told IANS that the RBI may start transferring the first tranche of the surplus this calendar, based on the Jalan panel report.[caption id="attachment_5684541" align="alignleft" width="380"] Representational image. Reuters.[/caption]With the economy facing a slowdown in key sectors, the government is looking at RBI dividends and surplus to step up public investment and tackle funding gaps.But any decision on capital transfers based on the panel's proposals may not come on Monday as the board members may need more time to study the recommendations.The board, however, most likely will announce the normal dividend to be paid to the government for FY19 based on the surplus, sources said.The government has already received Rs 40,000 crore during FY19.In February this year, the RBI had announced a Rs 28,000 crore interim dividend taking the total dividend transfer to the government to Rs 68,000 crore. The RBI Central Board will have to approve the Rs 28,000 crore interim dividend.So far the extent of capital reserves to be transferred to the government based on the Jalan panel report has been a matter of speculation.According to BofA Merrill Lynch, the ECF is expected to peg the excess capital of the RBI at Rs 1-Rs 3 lakh crore, where Rs 1 lakh crore is from contingency reserves and Rs 2 lakh crore from revaluation reserves."The RBI Act doesn't bar the RBI from transferring excess capital if any, to the fisc beyond the RBI's annual surplus," BofA Merrill Lynch said.As per 2017-18 annual report of the RBI, the reserves stand at Rs 9.6 trillion.