The Reserve Bank of India (RBI) has decided to transfer ₹1.76 lakh crore to the Central government from its own reserves. What are these reserves, how will this amount help the government and does this move harm the RBI?
To understand what the transfer is, we must first understand where the funds come from. The central bank has three different funds that together comprise its reserves. These are the Currency and Gold Revaluation Account (CGRA), the Contingency Fund (CF) and the Asset Development Fund (ADF).…
While it does not immediately do the RBI any harm, the fact remains that the central bank now has far less wiggle room in the event of a financial catastrophe, since its reserves have been emptied to their minimum levels or thereabouts.…
- Government’s ₹1.76 trillion RBI bonanza raises fresh stimulus hopes – By Gopika Gopakumar, Shayan Ghosh (Aug 27, 2019, Live Mint)
- How and why RBI transfers to government – By Shaji Vikraman (Aug 29, 2019, Indian Express)