In a windfall for the central government, the Reserve Bank of India has approved to transfer a sum of Rs.50,000 crore to the centre. This is the highest amount to be transferred by the RBI since 2015-2016.
This dividend is 63 per cent higher than the dividend paid last year (Rs.30,659 crore).
The government can choose to use this amount to replenish public sector banks (PSBs). The govt. had stated that it plans to infuse a total of Rs.2.11 trillion into PSBs, with Rs.1.35 trillion to be in the form of recapitalisation bonds, Rs.18,000 crore in the form of budgetary allocation, and Rs.58,000 crore through market borrowing.
According to a report by The Times of India, the Rs.50,000 crore paid to the government accounts for 91 per cent of the dividend income budgeted by the government in the budget this year.
With a majority of PSBs registering losses, they have been unable to pay any dividend to the govt. The RBI had, in March, paid Rs.10,000 crore as interim dividend.
The RBI Act of 1934 has provisions wherein the RBI is expected to pay its surplus money to the government. This surplus is computed after taking bad loans and doubtful debts, superannuation fund, depreciation in assets, etc. into account.
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Sources: Times of India, LiveMint, Zee Biz