New Delhi: The Reserve Bank of India (RBI), having changed management last month following a clash with the government, is likely to transfer an interim dividend of Rs. 30,000-40,000 crore to the government by March, according to three sources with direct knowledge of the matter, reported Reuters.
The amount would be three or four times the amount paid last year and would help the government meet its fiscal deficit target, despite a shortfall in revenue collections, most notably from a goods and services tax introduced in 2017, and from divestments.
The government had recently said at the end of December that it would not need RBI reserves to meet its fiscal deficit.
Former finance ministry official Shaktikanta Das was appointed as the new governor of the RBI, following resignation of Urjit Patel last month amid tensions over the dividend payout and other issues.
Aside from tensions over the dividend payout, the government has also been critical of the RBI's constraints on lending by state banks with high levels of non-performing loans.
The rupee hit a session low of 69.80 against the dollar on Monday, following the Reuters report on the interim dividend and impending revenue shortfall.
The government and RBI have now selected a panel to look into the issue around the sharing of the RBI's reserves.
The RBI typically generates revenue from trading in bonds and currencies, part of which goes toward building reserves, while the remainder is transferred to the government in the form of a dividend.
The interim dividend for this financial year ending in March would be decided by the RBI board separately and not by the six-member committee formed to review the future dividend transfer policy, said the sources, who asked not to be named as the discussions are private.
"We are absolutely sure that an interim dividend of more than 30,000 crore rupees would be paid before March end," one source is reported to have told Reuters.
The RBI did not respond to an email seeking comment, while the Finance Ministry declined to comment.
Speaking with the media in New Delhi on Monday, Das declined to comment on the report, beyond saying that the details would be shared once the RBI board made its decision.
This will be the second consecutive year in which the RBI has given the government an interim dividend, ahead of an annual payout that it normally gives the government in August, following the closing of the RBI's books in June.