Money & Banking
RBI to transfer Rs52,679 crore surplus profit to government

The amount, Rs52,679 crore, will provide some help to the Indian government, which proposes to bring down the fiscal deficit to 4.1% of GDP this fiscal from 4.5% last year


The Reserve Bank of India (RBI) will transfer to the Centre its surplus profit of Rs52,679 crore, about 60% more than the amount given last year.


"The Central Board of Directors of the Reserve Bank of India...Approved the transfer of surplus amounting to Rs52,679 crore for the year ended 30 June 2014 to the Government of India," the central bank said in a statement adding the transfer will take place on Monday.


Last year, the RBI had transferred its Rs33,010 crore surplus profit to the Centre.


The amount will provide some help to the government, which proposes to bring down the fiscal deficit to 4.1% of GDP this fiscal from 4.5% last year.


The Reserve Bank follows the July-June accounting year.



MG Warrier

2 years ago

This year RBI has chosen to transfer almost the entire surplus to government, according to reports. It is also reported that the gesture to support GOI is pursuant to a recommendation made by a panel headed by one of its directors Y H Malegam. The pressure on RBI to reduce its reserves and pass on the proceeds to Consolidated Fund of India was not new. Immediately, one has no access to the basis on which the Malegam Panel has certified the adequacy of the central bank’s reserves for the coming three years. Long back, after internal assessment, it was decided by RBI to target maintaining reserves at 12 per cent of the size of the balance sheet and till last year that was the objective.

Practice so far has been to give residual surplus after appropriation to central bank’s reserves. Just as ‘people get the government they deserve’, GOI and RBI can get the recommendations they ‘need’ from panels. RBI is already struggling to come out of a situation created by one such report. Yes, the reference is to the report of the Financial Sector Legislative Reforms Commission authored by Justice Srikrishna. This is not just a premature, harsh response to the beginninning of the gradual weakening of a central bank’s financial strength. Lamenting on the fall of RBI’s aggregate reserves from 11.9 per cent of balance sheet size to 10.1 per cent during the five year period ending June 2013, I had observed asunder:
“To ensure that temptations of government emanating from external compulsions do not dilute the strength of RBI’s balance sheet, GOI should take measures to augment the share capital and reserves of RBI after carrying out appropriate amendment to RBI Act. Till such time RBI should be allowed to retain surplus income by transfer to reserves. Considering the size of the balance sheet and the internal and external pressures on its income generating capabilities, as also the nature of shocks the bank has to absorb from time to time, the central bank’s reserves need to be augmented on an ongoing basis.”*
*Page 47, Banking, Reforms & Corruption: Development Issues in 21st Century India By M G Warrier([email protected])
M G Warrier, Mumbai

Government asks CJI, chief justices of high courts to fill vacancies

About 4,000 posts are vacant in the lower judiciary and 250 posts of judges in various High Courts


The union government has asked the Chief Justice of India (CJI) as well as Chief Justices of High Courts to fill up vacancies in various courts, mostly in lower judiciary, for speedy disposal of huge backlog of cases in the country.


Law Minister Ravi Shankar Prasad told Lok Sabha on Monday that about 4,000 posts are vacant in the lower judiciary and 250 posts of judges in various high courts.


"I have written to the Chief Justice of India and chief justices of various high courts to ensure that vacant posts are filled up at the earliest to clear the backlog of cases," he said during Question Hour.


Prasad's comment came after RK Singh from Bharatiya Janata Party (BJP) said the "judicial system in the country has collapsed" as there is huge backlog of court cases and it was leading to law and order problems.


With this, AIMIM member Asaduddin Owaisi and BJP's Murli Manohar Joshi pointed out that Singh was himself Union Home Secretary and asked as to how he could make such a statement.


Speaker Sumitra Mahajan advised the BJP member from Bihar to desist from making such sweeping comments to which Singh said he would follow the advice.


To a question on Gram Nyayalayas, Prasad said the government had planned to set up 5,000 Gram Nyayalayas at Panchayat level under the 12th Five Year Plan but so far only 159 of them could be set up.


He said the government has allocated Rs4,867 crore for development of judicial infrastructure under the centrally sponsored scheme for development of infrastructure facilities for judiciary during 12th Plan.


He said the issues affecting implementation of the Gram Nyayalayas scheme were discussed in the conference of Chief Justices of high courts and chief ministers on 7 April 2013.


Prasad said it was decided in the conference that state governments and high courts should decide the question of establishment of Gram Nyayalayas wherever feasible taking into account their local problems.


"The focus is on covering those Talukas under the Gram Nyayalayas scheme where regular courts have not been set up," he said.


Ebola: Maharashtra resident being treated for the symptoms

Maharashtra Health Minister Shetty said there is no need to panic as Ebola infection can happen only if there is a close contact with those infected


A resident of Vasai in Maharashtra’s Palghar district, who recently arrived in the country from Lagos in Nigeria, is being treated for symptoms of Ebola at an isolated ward of a government hospital.


Maharashtra Health Minister Suresh Shetty said Lalit Kumar was suffering from vomiting after returning from Lagos.


He is being treated in the isolation ward of a government hospital by doctors, he said.


His samples have been sent to Pune's National Institute of Virology for confirmation.


Shetty said there is no need to panic as Ebola infection can happen only if there is a close contact with those infected.


The World Health Organisation had last week issued a global health emergency due to Ebola virus disease (EVD) outbreak. WHO declared the current EVD outbreak as the “most complex outbreak leading to public health emergency,” calling for global health alert in all countries.


The four countries affected with EVD are all in western Africa— Guinea (393 deaths), Sierra Leone (286 deaths), Liberia (282 deaths) and Nigeria (1 death).


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