The RBI transfers surplus to the government as non-tax revenue after meeting operational costs and reserve provisions, as mandated by Section 47 of the RBI Act. Governed by the Economic Capital Framework, this supports fiscal needs, reduces borrowing, and enhances public spending while ensuring RBI’s financial stability through adequate reserves.
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Picture Courtesy: INDIAN EXPRESS
The central board of directors of the Reserve Bank of India (RBI) reviewed the Economic Capital Framework (ECF), which is used to determine risk provisioning and surplus distribution by the central bank to the government.
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