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Panel to examine Economic Capital Framework
November 30 , 2018
2058 days
1023
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- The RBI, in its board meeting, has decided to set up an expert committee to examine the central bank’s Economic Capital Framework (ECF).
- It will decide the amount of reserves RBI can maintain and handing over the balance to the government.
- The panel has been setup to examine the framework to enable transfer of reserve worth Rs 3.6 lakh crore to Government of India.
- The membership and terms of reference of the committee will be jointly determined by the government and the RBI.
- This decision was made after a key demand of the government on the same for transfer of a surplus of Rs 3.6 lakh crore.
- This is more than a third of the total Rs 9.6 lakh crore reserves of the central bank to the government.
- The RBI agreed to consider a scheme for restructuring of stressed standard assets of MSME (Micro, Small and Medium Enterprises) borrowers with aggregate credit facilities of up to Rs 250 million.
Background
- The decision comes in the wake of difference of opinion between the RBI governor and the Finance Ministry over certain issues, which has resulted in a public spat.
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