RBI to pay govt Rs 50,000 cr div­i­dend

India Business Journal - - NEWS ROUND-UP -

The RBI will trans­fer Rs 50,000 crore of its sur­plus money to the gov­ern­ment. This is the high­est div­i­dend pay­out from the central bank since 201516, and it comes as a par­tial relief for the gov­ern­ment that is strug­gling to re­plen­ish

public sec­tor banks. The div­i­dend gives the gov­ern­ment more el­bow room to in­fuse cap­i­tal into the banks it owns. In FY17, the central bank had trans­ferred a lower sur­plus, ow­ing to the huge costs it had in­curred in man­ag­ing the de­mon­eti­sa­tion ex­er­cise. The RBI's ex­penses in­clude in­ter­est it pays to banks when it ab­sorbs liq­uid­ity from the sys­tem through its Repo op­er­a­tions.

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