New Delhi: A high-level panel led by former RBI governor Bimal Jalan, set up to decide the appropriate capital reserves that the central bank should maintain, is likely to submit its report by June. The six-member Jalan panel was appointed on December 26, 2018 to review the Economic Capital Framework for the RBI. “The report is not finalised yet. More meetings will take place. The (Economic Capital Framework) panel is expected to finalise its report by May-June,” Jalan said.
The panel has got extension beyond three months term, he said. The committee was to submit its report in 90 days from the first day of its meeting, which held on January 8. The other key members of the committee include Rakesh Mohan, the former deputy governor of RBI as the vice-chairman, finance secretary Subhash Chandra Garg, RBI deputy governor NS Vishwanathan, and two RBI central board members — Bharat Doshi and Sudhir Mankad. The panel has been entrusted with the task of reviewing the best practices followed by central banks worldwide in making assessment and provisions for risks, which a central bank balance sheets are subject to.
The panel will propose a suitable profit distribution policy, taking into account all the likely situations of the RBI, including the situation of holding more provisions than required. The government and the RBI under previous governor Urjit Patel had been at loggerheads over the Rs 9.6 lakh crore surplus capital with the central bank. The finance ministry was of the view that the buffer of 28 per cent of gross assets maintained by the RBI is well above the global norm of around 14 pc. Following this, the RBI board in its meeting on November 19, 2018 decided to constitute a panel.