- by Stocktry Expert
- 05th Aug 2020
RBI board to meet on 14 August over dividend
According to the Union Budget 2020-21, the government budgeted around ₹60,000 crores as dividends from RBI and state-run banks and financial institutions,
Former RBI governor Bimal Jalan is going to be the head of the panel which has been set up in 2018 and recommended formula for the sharing of its profits with the government.
RBI did not pay any interim dividend to the government for the year to June 2020 as the Jalan panel had recommended that interim dividend should be paid to the government only in “exceptional circumstances".
The dividend from RBI will come at a time when the Centre’s finances are under severe strain. The government’s fiscal deficit as on 30 June touched 83.2% of the full-year target of ₹7.96 trillion, primarily on a sharp fall in revenues due to the nationwide lockdown.
Chief economist Soumyakanti Ghosh said “The liquidity situation, given that there has been a preponderance of excess liquidity in the banking system, which is parked with RBI, may have a connotation in the form of a lower dividend to government,"
He added “Dividend transfer also needs to be juxtaposed against the possibility of monetization of government deficit in the current fiscal,"