RBI’s Transfer of Surplus to Government:
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RBI transfers its surplus profits to the Government according to the provisions of Section 47 of the Reserve Bank of India Act, 1934.
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Section 47 says that surplus profits of the RBI are to be transferred to the government.
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Surplus profit is the profit left after making various contingency provisions for bad and doubtful debts, depreciation in assets, contributions to staff, and superannuation funds, etc.
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RBI transfer to Government for 2020-21:
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RBI has decided to transfer the surplus for the nine-month period of June 2020 to March 2021.
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This was because RBI in 2020 has changed its accounting year to April-March from the earlier period of July-June.
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Further, RBI has transferred the amount by keeping into account the Bimal Jalan Committee. The committee recommended that the RBI maintain a minimum Contingency Risk Buffer of 5.5% of its balance sheet.
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The RBI’s transfer of Rs 99,122 Cr to the government is above the budgeted expectations. The budget had estimated to receive a surplus of about ₹50,000 crores from the RBI for 2021-22.
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This is the second highest transfer after 2018-19.