{"id":296675,"date":"2024-05-23T17:52:38","date_gmt":"2024-05-23T12:22:38","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=296675"},"modified":"2024-05-23T20:53:02","modified_gmt":"2024-05-23T15:23:02","slug":"economic-capital-framework-2","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/economic-capital-framework-2\/","title":{"rendered":"Economic Capital Framework"},"content":{"rendered":"<p><strong>Source<\/strong>-This post on <strong>RBI to Transfer \u20b92,10,874 Crore Surplus to Centre for FY24\u00a0<\/strong>has been created based on the article<a href=\"https:\/\/epaper.thehindu.com\/ccidist-ws\/th\/th_delhi\/issues\/84180\/OPS\/GA3CR6DJF.1+G8TCR7BPS.1.html\" target=\"_blank\" rel=\"noopener\"> &#8220;RBI to transfer \u20b92,10,874 cr. surplus to Centre for FY24<\/a>&#8221; published\u00a0in \u201c<b>The Hindu<\/b>\u201d on 23 May 2024.<\/p>\n<h2>Why in News?<\/h2>\n<p>Recently, the Reserve Bank of India\u2019s board <span style=\"color: #ff0000;\">approved the transfer of a record \u20b92,10,874 crore surplus to the Union government for the fiscal year 2023-24<\/span>.<\/p>\n<h2>About Record Surplus Transfer<\/h2>\n<figure style=\"width: 560px\" class=\"wp-caption alignnone\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/epaper.thehindu.com\/ccidist-ws\/th\/th_delhi\/issues\/84180\/OPS\/Public\/GA3CR6DJF.1%2BG8TCR7C3L.1.png?resize=560%2C354&#038;ssl=1\" alt=\"RBI to transfer \u20b92,10,874 cr. surplus to Centre for FY24\" width=\"560\" height=\"354\" \/><figcaption class=\"wp-caption-text\"><strong>Source: The hindu<\/strong><\/figcaption><\/figure>\n<p>1. The Reserve Bank of India (RBI) has approved a <span style=\"color: #ff0000;\">record transfer of \u20b92,10,874 crore as surplus<\/span> to the Union government for the fiscal year 2023-24. This amount is more than <span style=\"color: #ff0000;\">double the amount transferred in the previous fiscal year <span style=\"color: #333333;\">(<\/span><\/span><span style=\"color: #333333;\">FY23)<\/span>. The RBI Board also <span style=\"color: #ff0000;\">decided to increase the Contingent Risk Buffer<\/span> (CRB) to 6.50% for FY24, up from 6% in the previous year.<\/p>\n<p><strong>Fiscal Impact of transfer: <\/strong>It would have following impact:<\/p>\n<p>a) The substantial surplus transfer is expected to<span style=\"color: #ff0000;\"> aid the Centre&#8217;s fiscal consolidation efforts.<\/span><\/p>\n<p>b)\u00a0 This will also help to<span style=\"color: #ff0000;\"> keep the fiscal consolidation program on track.<\/span><\/p>\n<p>2. The surplus was <span style=\"color: #ff0000;\">calculated based on the Economic Capital Framework (ECF)<\/span> adopted by the RBI on August 26, 2019.<\/p>\n<h2>About Economic Capital Framework (ECF)<\/h2>\n<p>1. The economic capital framework provides a <span style=\"color: #ff0000;\">methodology for determining the appropriate level of risk provisions and profit distribution<\/span> to be made under<span style=\"color: #ff0000;\"> Section 47 of the RBI Act<\/span>, <span style=\"color: #ff0000;\">1934<\/span>.<\/p>\n<p>As per this provision, the central bank is required to<span style=\"color: #ff0000;\"> pay the balance of its profits to the central government<\/span> after <span style=\"color: #ff0000;\">making provision for bad and doubtful debts<\/span>, <span style=\"color: #ff0000;\">depreciation in assets<\/span>, and <span style=\"color: #ff0000;\">contributions to staff<\/span>.<\/p>\n<p>2. This framework was <span style=\"color: #ff0000;\">recommended by the Expert Committee to Review the Extant Economic Capital Framework<\/span> of the Reserve Bank of India.<\/p>\n<p><strong>UPSC Syllabus: Indian Economy<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source-This post on RBI to Transfer \u20b92,10,874 Crore Surplus to Centre for FY24\u00a0has been created based on the article &#8220;RBI to transfer \u20b92,10,874 cr. surplus to Centre for FY24&#8221; published\u00a0in \u201cThe Hindu\u201d on 23 May 2024. Why in News? Recently, the Reserve Bank of India\u2019s board approved the transfer of a record \u20b92,10,874 crore surplus&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/economic-capital-framework-2\/\">Continue reading <span class=\"screen-reader-text\">Economic Capital Framework<\/span><\/a><\/p>\n","protected":false},"author":10366,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[11872,10498],"class_list":["post-296675","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-public","tag-9pm-daily-factly","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/296675","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10366"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=296675"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/296675\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=296675"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=296675"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=296675"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}