BLOGS

THE BILLION DOLLAR QUESTION:HOW TO TRANSFER RBI RESERVES?

The Bimal Jalan Committee on Economic Capital Framework met on July 17, 2019, and has suggested that surplus reserves of the RBI should be transferred to the government in phases

over 3-5 years. The final report to be presented before RBI Governor in 15 days has proposed a formula for the ‘nominal transfer’ of the RBI surplus reserves. The issue of transfer of RBI reserves has been a contentious one, with many experts expressing their views on the issue vociferously. The report of the Committee gets the Govt. one step closer to obtaining the RBI reserves and using it for its own purpose.

This article explores ways of how the RBI reserves can be used to achieve maximum gains of an exercise. In this backdrop, four options are being explored in this article.