The Reserve Bank of India (RBI) said on Thursday that it would pay Rs30,659 crore as a dividend to the government, less than half the surplus it transferred the previous year, potentially affecting the government’s fiscal math this financial year.
In the budget for 2017-18, finance minister Arun Jaitley had pegged dividend income from RBI, public sector banks and financial institutions at Rs74,901 crore. With public sector banks still struggling to make profits because of the heavy stressed asset load on their balance sheets, the bulk of this dividend would have been expected from RBI.
Economists said lower returns from the central bank’s foreign asset holdings and the costs of demonetisation—printing new currency notes and managing the increasing liquidity in the banking system—were possible reasons for a fall in RBI’s profits.
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