High dividend pressure on Reserve Bank of India | Business Standard#.UTFh3o-sMEA.blogger#.UTFh3o-sMEA.blogger#.UTFh3o-sMEA.blogger#.UTFh3o-sMEA.blogger#.UTFh3o-sMEA.blogger

High dividend pressure on Reserve Bank of India | Business Standard#.UTFh3o-sMEA.blogger#.UTFh3o-sMEA.blogger#.UTFh3o-sMEA.blogger#.UTFh3o-sMEA.blogger#.UTFh3o-sMEA.blogger

For brevity and clarity, let me quote from my own comments on need to augment RBI's reserves and thereby strengthen the central bank's balance sheet recorded in August 2012 in the context of higher transfer of 'surplus' by RBI to GOI:


"To ensure that temptations of government emanating from external compulsions do not dilute the strength of RBI’s balance sheet, GOI should take measures to augment the share capital of RBI after carrying out appropriate amendments to RBI Act. Till such time RBI should be allowed to retain surplus income by transfer to reserves. Considering the size of its balance sheet and the internal and external pressures on its income generating capabilities, as also the nature of shocks the Bank has to absorb from time to time, the central bank’s reserves need to be augmented on an ongoing basis" M G Warrier

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