The Swadeshi Jagran Manch, an influential economic affiliate of the ruling BJP, has said government is the sole owner of the RBI profits and surpluses and has hit out at the earlier central bank management for sending out the impression that the Centre wanted to snatch the bank's profits.
"Nowhere in the world the central bank keeps the profits with them. Government owns the RBI profit. The whole picture painted by the RBI executives of that time is that the surplus is the property of RBI which the government wants to take away. It was an anti-patriotic picture with imprudent approach. They (the erstwhile RBI managers) also know, as professional bankers, that nowhere in the world the profits are kept with the central bank," Ashiwini Mahajan, the co-convenor of Swadeshi Jagran Manch (SJM), the economic wing of the Rashtriya Swayamsevak Sangh (RSS) told IANS.
"Over the years, the reserves got piled up. The new (Jalan) panel has now given a road map under which the reserves would be transferred to the government. It is the right of the people of this country representated by the government to make use of any profit made by the monetary authorities. RBI has no contingency. Central government does the recapitalisation of banks, any risk to depositors' money, government takes care, so where is RBI's contingency?" asked Mahajan.
Government had set up a six-member committee headed by former RBI Governor Jalan to examine the central bank's requirements on provisions, reserves and buffers to determine how much of the reserves could be transferred to the government. The committee had recommended that the surplus reserve held by the central bank be transferred to the government in tranches over three to five years.
But the fight over the RBI profits and surpluses saw skirmishes between North Block and then RBI management led by Governor Urijit Patel and his deputy Viral Acharya who said the funds belonged to RBI. After a bitter inconclusive fight, a panel was set up under Bimal Jalan which has finalised the report but yet to submit it. There was lack of consensus over the transfer of profits and surplus in that panel as well, where the former finance secretary and Finance Ministry nominee Subhash Chandra Garg dissented on the worked out formula.
As per the annual report of RBI, the total reserves are Rs 9.59 lakh crore.