Former Reserve Bank of India (RBI) governor Bimal Jalan, who is heading the high-level panel to decide the appropriate capital reserves for the central bank, on Friday said that he is hopeful of submitting the report by the end of this month.
The six-member Jalan panel was appointed on December 26, 2018, to review the Economic Capital Framework for the RBI. The committee was supposed to submit its report in 90 days from the first day of its meeting, which held on January 8.
In an interview to CNBC-TV18's Latha Venkatesh, Jalan said, "The first priority for the government is to implement what was announced by the Prime Minister Narendra Modi and the government earlier. It has to take measures which will reduce the government’s role in the administrative system or in the political system."
Former RBI governor said that the biggest challenge of the government is how to decentralise powers and centre has taken some measures to do that, "Let the ministers decide the policy. Also, give the implementation part to the agencies which are involved and the agency should be accountable to government and government should monitor it."
The panel has been entrusted with the task of reviewing the best practices followed by central banks worldwide in making assessment and provisions for risks, which central bank balance sheets are subject to.
The panel will propose a suitable profit distribution policy, taking into account all the likely situations of the RBI, including the situation of holding more provisions than required.
The government and the RBI under the previous governor Urjit Patel had been at loggerheads over the Rs 9.6 lakh crore surplus capital with the central bank.