Govt to seek interim dividend from RBI

​New Delhi: The government will seek interim dividend from the Reserve Bank of India (RBI), Economic Affairs Secretary Subhash Chandra Garg said Wednesday. Last fiscal, the RBI paid an interim dividend of Rs 10,000 crore to the Centre. RBI follows the July-June calender. Asked if the government will seek interim dividend from RBI this year, he said, "Yes." 

The secretary also said the committee which will examine the economic capital framework of the Reserve Bank has almost been finalised. "Panel on economic capital framework has virtually been agreed. Hopefully, soon it will be announced," he said at the sidelines of an event organised by PHD Chamber here. 

On November 19, the central board of the RBI had decided to constitute an external committee to examine its economic capital framework. The composition and terms of reference of the committee were to be decided jointly by the government and the RBI. The government and the RBI have been locked in a tussle over various issues, including transfer of excess reserves of the central bank. 

Finance Minister Arun Jaitley had earlier said the government does not need any extra funds from the Reserve Bank or any other institution to meet the fiscal deficit target. Garg too had earlier tweeted that there is no proposal to ask the RBI to transfer excess reserves and the only issue under discussion "is to fix appropriate economic capital framework of RBI".

Meanwhile, former chief economic advisor Kaushik Basu said in Mumbai that the final decision on transferring a part of the excess reserves to the government has to be that of the Reserve Bank (RBI) alone and any attempt to take away its autonomy could pose a risks to the economy. 

The comments come within two days of former RBI governor Raghuram Rajan cautioning that transfer of the reserves may bring down the rating of the central bank. "There is scope for transfer of excess reserves of the RBI to the government, but it has to be the RBI's decision. You can't do that by confiscation by the government,” he said.