The Reserve Bank of India (RBI) will be transferring a surplus of Rs 1.76 lakh crore to the government in line with the Bimal Jalan committee recommendations, reports Economic Times.

In a board meeting held yesterday (26 August), the revised economic capital framework was adopted according to which the surplus comprises Rs 1,23,414 crore for 2018-19 and Rs 52,637 crore of excess provisions.

The Bimal Jalan committee had recommended a surplus distribution policy, which targets the level of realised equity to be maintained by the RBI, within the overall level of its economic capital. Earlier policy targeted total economic capital level alone.

“Only if realised equity is above its requirement, will the entire net income be transferable to the government. If it is below the lower bound of requirement, risk provisioning will be made to the extent necessary and only the residual net income (if any) transferred to the government,” RBI said in a release.

For the year 2018-19, financial resilience was within the desired range therefore the entire net income of Rs 1,23,414 crore will be transferred to the government. Out of this, Rs 28,000 crore has already been paid as interim dividend. In addition, Rs 52,637 crore of excess risk provisions were written back and consequently will be transferred.

The surplus capital transfer is expected to help the government meet fiscal deficit target as it will come as a windfall to the exchequer.