Bimal Jalan committee suggests RBI pay interim dividend to Union government only under exceptional circumstances

The Bimal Jalan Committee has suggested that the Reserve Bank of India’s (RBI’s) economic capital framework must be periodically reviewed after every five years and its accounting year (July-June) be aligned with the fiscal year that ends on 31 March. The Committee has recommended that the central bank pay interim dividend to the government (a practice that started in 2016-17) only under exceptional circumstances. The committee also recommended that the RBI should put in place a framework for assessing the market risk of its off-balance sheet exposures in view of their increasing significance. The panel also suggested a clearer distinction between the two components of economic capital — realised equity and revaluation balances — mainly because of the volatile nature of the revaluation balances.