Let RBI decide

Finance ministry's insistence on a dividend policy is unwarranted

The Reserve Bank of India (RBI) is reportedly studying the feasibility of a dividend policy, which will require it to transfer to the government a pre-determined portion of the surplus it earns. The policy, which is being discussed on the insistence of the government, would require amendments to the RBI Act. The matter was raised by the government’s nominees to the RBI board following differences over the dividend paid for 2016-17.

The RBI had transferred Rs 306 billion of its surplus to the government, which was less than half the Rs 659 billion it gave a year earlier. As