RBI approves transfer of surplus amounting to Rs 500 billion to Union Government for FY18

The Reserve Bank of India (RBI) has approved the transfer of surplus amounting to Rs 500 billion (Rs 50,000 crore) to the Government of India (GoI) for FY18. The decision was taken at its Central Board of Directors meeting on August 8, 2018. The RBI follows July-June accounting year. In the Union Budget for 2018-19, the government had budgeted Rs 54,817 crore to come from the payment of dividend or surplus from the RBI, nationalized banks and financial institutions. Thus, the surplus transfer should come as a huge relief to the Centre which would otherwise have been forced to look at other means of revenue to bridge the gap. Under the RBI Act, 1934, the central bank is required to pay the government its surplus after making provisions for bad and doubtful debts, depreciation in assets and, contribution to staff and superannuation fund among others.