- The Reserve Bank of India (RBI) approved a ₹2.11 lakh crore dividend payout to the central government for 2023-24, more than double the amount it paid for the previous 2022-23 financial year.
| Economic Capital Framework (ECF)It provides a methodology for determining the appropriate level of risk provisions and profit distribution to be made under Section 47 of the RBI Act, 1934.As per this provision, the RBI is required to pay the balance of its profits to the central government after making provisions for bad and doubtful debts, depreciation in assets, and contributions to staff.The RBI, in consultation with the union government, had constituted a Dr Bimal Jalan committee to review ECF, in November 2018.The risk provisioning made from economic capital to cover monetary, fiscal stability, credit and operation risks is cumulatively referred to as the Contingent Risk Buffer (CRB). |
- As per the RBI, the economy remains robust and resilient, the Board has decided to increase the Contingent Risk Buffer to 6.5% for FY 2023-24.
- The transferable surplus for the year (2023-24) has been arrived at based on the Economic Capital Framework (ECF) adopted by the Reserve Bank of India, as per recommendations of the ‘Expert Committee to Review the extant Economic Capital Framework of the Reserve Bank of India’.
Dig Deeper: Read about other provisions of the RBI Act of 1934.
