The Reserve Bank of India (RBI) is India’s central bank and regulatory body under the jurisdiction of the Ministry of Finance, Government of India. It is responsible for the issue and supply of the Indian rupee and the regulation of the Indian banking system. It also manages the country’s main payment systems and works to promote its economic development.
When did the Reserve Bank of India conduct its last General Body Meeting? What did they review in the meeting?
Reserve Bank of India conducted its 589th meeting of the Central Board of Directors of Reserve Bank of India on 21st May 2021 under the Chairmanship of Sh. Shaktikanta Das (Governor of Reserve Bank of India) through the mode of video conferencing. During the meeting, the Board reviewed the current economic situation of the country, challenges at the global and domestic level, and the Reserve Bank of India’s action and policy measures taken due to the extreme impact of the second wave of COVID- 19 on the country’s economy. In the meeting, it was also discussed and the Annual Report and Accounts of the Reserve Bank was approved of the transition period of time period 9 months, that is, from July 2020 to March 2021.
What is the biggest decision that the Reserve Bank of India made in its Annual General Meeting?
And the biggest news from the meeting is that the Reserve Bank of India has decided and approved to transfer a surplus of Rs 99,122 crore from its earnings to the government for the year July 2020 to March 2021 and also coming to the decision of maintaining the Contingency Risk Buffer at 5.50%.
Most of the people would be having a big doubt as to why the Reserve Bank of India has to transfer money to the government? As per economists, it is said that the biggest source of income of the Reserve Bank of India is through government bonds, investment in gold, forex, and bond trading in the foreign market. The Reserve Bank of India had a record surplus in this period of 9 months as it had actively taken part in both foreign exchange markets and gold. It sold dollars at a great profit and bought record bonds in the money market having good returns.
The Reserve Bank of India is not required to pay any kind of income tax returns. Hence whatever surplus is left with the bank after fulfilling the needs, necessary provisions and required investment will be transferred to the government. Reserve Bank of India’s income is through the interest received on invested money in bonds. Hence this year the Central Board of the Reserve Bank of India has decided and approved of transferring a sum of Rs 99,122 crore to the government.
To know more about the Reserve Bank of India’s balance sheet, the most important point is, it is not prepared like how it is prepared for other companies. Reserve Bank of India’s property of 26% is in the form of reserves. It invests in foreign exchange markets too, in Indian government bonds and gold wherein the Reserve Bank of India holds around 600 tonnes of gold reserve.
Combined with foreign exchange reserves, it comprises 77% of the total assets of the bank. It is also to be learned that the Reserve Bank of India holds an Emergency Fund or Contingency Fund (CF) which is a special provision to meet urgent needs to manage the exchange rate and monetary policy. In 2017- 18 it had a Cash Flow of 2.32 lakh crores (6.4% of the assets of Reserve Bank of India). From 2013- 14, for 3 years it did not hold any Cash Flow as the committee thought that the bank already had a lot of economic capital/ buffer capital.
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