Thread by @someshjha7

Exclusive: RBI nod to Bimal Jalan panel's report on surplus led to Rs 1-trillion boost for the NDA government. Business Standard reviewed official documents, including minutes of the RBI's central board meet held in August 2019. Do read:

business-standard.com/article/econom…

The govt would have received Rs 73,984 cr from the RBI in 2019-20 if the central bank had adopted the previous economic capital framework. 

RBI has transferred Rs 1.76 trillion to the government, including Rs 1.23 trillion of surplus & Rs 52,637 crore of ‘excess provisions’.

Also, the RBI chose to go for maintaining a lower level of contingency risk buffer. The Jalan panel had recommended CRB in range of 5.5-6.5% of RBI's balance sheet. Since RBI decided to keep it at 5.5%, the 'excess' outgo was Rs 52,637 cr instead of Rs 11,608 crore.

Rakesh Mohan, the co-chairman of the Jalan committee, had told me in an interview last year that the RBI could have gone for higher risk provisioning while accepting its recommendations.

business-standard.com/article/econom…

In case you missed this bit: The Jalan panel recommendations were vetted by the RBI's audit & risk mgmt. sub-committee which had 3 members of the Jalan committee.

Then, a member part of the Jalan committee prepared a note for seeking the approval of the RBI's central board.

Here is the note prepared by RBI deputy governor N.S. Vishwanathan which was tabled in the RBI's board meeting for approval. (1/2)

Here is the note prepared by RBI deputy governor N.S. Vishwanathan which was tabled in the RBI's board meeting for approval. (2/2)

Record of discussions on the Bimal Jalan committee report in the RBI's board meeting held on August 26, 2019.