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RBI pushes fiscal year-end to June to match govt accounting

The RBI financial year 2019-20 will end on 30 June this year while the fiscal year 2020-21 will begin on 1 July and end on 31 March 2021

Linking the Reserve Bank of India’s accounting year with the union government’s fiscal year, the central bank, the central bank on 22 March had decided to reduce the span of its next accounting year from 31 July 2020 to 31 March 2021.

Presently, the RBI accounting year is from July to June. With a decrease in the duration of FY 20-21, the central bank’s accounting year in 2021 will coincide with the Centre’s fiscal year (April 2021-March 2022).

RBI matches Centre’s financial year

Earlier in February, following the RBI governor’s subsequent budget, Shaktikanta Das had said the move was under consideration. This alignment was recommended by the Bimal Jalan panel to review the economic capital structure of the central bank.

The panel recommended that both should be in sync by the beginning of the accounting year 2020-21.

Bimal Jalan panel’s suggestion

“RBI will be able to give a better estimate of projected surplus transfers for the fiscal year for budget purposes,” Jalan had said about the interim dividend by RBI. The panel recommended that with this alignment, the payment of an interim dividend may then be limited to exceptional circumstances.

To enable domestic liquidity among volatile markets coupled with a slowdown in global trade, the RBI on Monday announced large liquidity injections through the repo window under the liquidity adjustment facility. The central bank said it would offer Rs 1 lakh crore to all banks through repo operations. The LTRO will be held in two phases of Rs 50,000 crore each on 23 March and the rest on Tuesday.

The RBI on Monday conducted another six-month US dollar sell-buy swap to provide liquidity to the foreign exchange market. The central bank will buy Rs 15,000 crore in government bonds on 24 and 26 March.

On Monday, the Sensex lost 3,935 points to close at 25,981.24 in the market, while the Nifty lost 1,135.20 points to close at 7,610.25.

Sirf News Network

By Sirf News Network

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