Jalan panel on RBI capital reserves to meet one more time, submit report by June end

NEW DELHI: The Bimal Jalan committee, which is looking into the size of capital reserves that the RBI should hold, will have one more meeting before finalising its report to be submitted to the apex bank by month-end.

“Report has not been finalised,” Jalan said, adding that there would be one more meeting before finalising the report.

The six-member panel under former RBI governor Bimal Jalan was appointed on December 26, 2018, to review the Economic Capital Framework (ECF) for the Reserve Bank after the finance ministry wanted the RBI to follow global best practices and transfer more surplus to the government.

The RBI has over Rs 9.6 lakh crore surplus capital with it.

The ECF panel was mandated to submit its report to the RBI within 90 days of its first meeting, which took place on January 8. Following this, the panel was given a three-month extension. Asked about the reason for delay in finalisation of the report, the official said, “There may be differences of opinion, but that is being discussed”.

The other key members of the panel include Rakesh Mohan, former deputy governor of RBI as the vice-chairman, finance secretary Subhash Chandra Garg, RBI deputy governor N S Vishwanathan, and two RBI central board members — Bharat Doshi and Sudhir Mankad.

The panel has been entrusted with the task of reviewing the best practices followed by central banks worldwide in making assessment and provisions for risks. The government and the RBI under its previous governor Urjit Patel had been at loggerheads over the Rs 9.6 lakh crore surplus capital with the central bank.

The finance ministry was of the view that the buffer of 28% of gross assets maintained by the RBI is well above the global norm of around 14%. Following this, the RBI board in its meeting on November 19, 2018, decided to constitute a panel to examine the Economic Capital Framework.