RBI to conduct its first half-yearly audit
Board meeting on February 18 to approve interim dividend
The Reserve Bank of India (RBI) is getting its half-yearly balance sheet audited to determine the amount of interim dividend it can give the central government.
Though a concurrent audit of its accounts is done on a quarterly basis, this is the first time a board-level statutory audit of the RBI is being conducted.
The audit of the central bank’s accounts for the period July-December 2018 is underway and the audit committee of its board of directors will meet shortly to approve it, RBI sources told Business Standard.
An e-mail query to an RBI spokesperson didn't elicit any response.
This is a departure from its practice of conducting an annual audit of accounts based on the profit numbers available for the July-June period, which is the RBI’s financial year.
“This is the first time that a limited review, in the form of a half-yearly audit, is being conducted for the RBI’s accounts by the board’s audit committee. The RBI will move towards half-yearly audit regularly, apart from an annual audit of its finances to determine the profits,” a source said.
A former RBI deputy governor said though the half-yearly accounts of the RBI were closed as a recent practice, a statutory audit of its accounts on a half-yearly basis was not done in the past.
The RBI’s central board is slated to now hold its customary post-Budget meeting in New Delhi on February 18, instead of February 9, as was planned earlier. Finance Minister Piyush Goyal will address the meeting, in accordance with convention.
The RBI had set up a committee headed by its former governor Bimal Jalan in December to re-work the “economic capital framework” of the central bank to determine the level of surplus the RBI should hold. However, the source said the interim dividend to the Centre would be based on the old framework for now because the panel was to submit its report by April.
Soon after Goyal presented the interim Budgetfor2019-20onFebruary1, Economic Affairs Secretary S C Garg had said the Centre expected an interim dividend of ~28,000 crore from the RBI for the current financial year.
In 2018-19, the Central government received ~40,000 crore as dividend from the central bank. The interim Budget has revised the dividend from the RBI, nationalised banks and financial institutions from ~54,817 crore to ~74,140 crore for 2018-19.
The RBI’s annual surplus, except in the year demonetisation was announced by the government, stands at around ~56,000 crore usually. According to the recommendations made by a committee led by Y H Malegam in 2014, the RBI can transfer its entire surplus to the government without allocation to its reserve funds.
The RBI had transferred an interim dividend of ~10,000 crore in 2017-18 to the central government on the latter's request. The dividend received by the government from the RBI stood at ~40,659 crore in 2017-18.