In a significant development, the Reserve Bank of India (RBI) has approved a historic transfer of Rs 2,10,874 crore as surplus to the Central government for the accounting year 2023-24.
This remarkable dividend marks the highest-ever amount disbursed by the RBI to the government, reinforcing its fiscal stance.
The surplus transfer underscores a substantial windfall for the government, enabling it to potentially curtail borrowing.
This move, in turn, is expected to inject liquidity into the banking sector. This fosters increased lending to both corporates and consumers, thus stimulating economic growth.
Exceeding government forecasts, interim budget documents for the current fiscal year projected a dividend of:
- Rs 1.02 lakh crore from the RBI
- Public sector banks
- Other financial institutions
However, the actual dividend has exceeded these projections, signifying an unforeseen financial boon.
Notably, the RBI’s decision to allocate a higher amount to the government follows an augmentation in risk provisioning under the Contingent Risk Buffer (CRB) to 6.5 percent for FY 2023-24.
Governor Shaktikanta Das, presiding over the Board of Directors meeting, highlighted the rationale behind the increased CRB.
He announced that with the revival in economic growth in FY 2022-23, the CRB has increased to 6.00 percent.
“As the economy continues to display robustness and resilience, the Board has decided to raise the CRB to 6.50 percent for FY 2023-24,” Governor Shaktikanta Das said.
In prior accounting years, spanning from 2018-19 to 2021-22, the Board had opted to maintain the CRB at 5.50 percent.
This decision aligned with macroeconomic conditions and aimed to mitigate the impact of the Covid-19 pandemic on economic stability.
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