Economic Capital Framework (ECF)

Recently, a controversy erupted when the Reserve Bank of India (RBI) decided to transfer a surplus of Rs 1.76 lakh crore to the Government of India exchequer.

  • The RBI transfers the “surplus”, i.e., the excess of income over expenditure, to the government, in accordance with Section 47 (Allocation of Surplus Profits) of the Reserve Bank of India Act, 1934.
  • In 2019, RBI formed a committee under the chairmanship of Bimal Jalan to review the provisions under the Economic Capital Framework. The objective of the economic capital framework is to build harmony between the central bank’s need for autonomy and the Government's objectives ....
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