Updated By: LatestGKGS Desk
RBI approved 57000 Crore dividend to GoI as per RBI Act 1934
Reserve Bank of India (RBI) approved 57 Thousand Crore dividend to Government of India on the eve of 74th Independence Day
The Reserve Bank of India (RBI) on Friday 14th August 2020 approved a dividend payment of Rs 57,000 crore to the government at the 584th meeting of the Central Board of the RBI chaired by governor Shaktikanta Das.
The RBI board approved the transfer of Rs 57,128 crore as surplus to the central government for the accounting year 2019-20. The central bank is successful in maintaining the contingency risk buffer at 5.5%.
According to the RBI Act of 1934, section "Allocation of Surplus funds" mandates for any profits made by the Reserve Bank from its operations to be sent to the Centre.
The RBI primarily earns its profits from the following areas:
1. The interest gets from the purchase and sale of government securities (G-secs).
2. The interest earned from lending to banks and interest earned on bond holdings earned on open market principles.
From this, the net profit is calculated by subtracting the operation expenditures, and other expenses as per the RBI Act.
