Bimal Jalan committee to review Economic Capital Framework (ECF) for RBI

The six-member expert committee led by former RBI governor Bimal Jalan was appointed on December 26, 2018 to review the Economic Capital Framework (ECF) for the Reserve Bank of India (RBI). It is in news recently because the Jalan panel is likely to submit its report by June 2019. The panel is expected to spell out details regarding how the RBI should handle its reserves and whether it can transfer its surplus to the government. The report is also expected to detail the amount the central bank should transfer to the government. The terms of reference of the committee would be to review status, need and justification of various provisions, reserves and buffers presently provided for by the RBI. The committee will also review best practices followed by the central banks globally in making assessment and provisions for risks, to which central bank balance sheets are subjected.