Dr. Bimal Jalan
(Former Governor of RBI)

The Reserve Bank of India (RBI), in consultation with the Government recently has set up a six-member committee to review the economic capital framework of the Central Bank. The committee would submit its report within 90 days from the date of its first meeting. [1]

Members:

1. Chairman: BImal Jalan (Former Governor of RBI) [2]
2. Deputy- Chairman: Rakesh Mohan (Former Deputy- Governor of RBI)
3. Subash Chandra Garg (Economic Affairs Secretary)
4. N.S. Vishwanathan (Deputy Governor of RBI)
5. Bharat Doshi (RBI Board member)
6. Sudhir Mankund (RBI Board member)

Terms of Reference of the Committee

1. To review status, need and justification of various provisions, reserves and buffers presently provided for by the RBI, keeping in mind “public policy mandate of the RBI, including financial stability considerations.”



2. To review best practices followed by the central banks globally in making assessment and provisions for risks, to which central bank balance sheets are subjected.

3. To suggest an adequate level of risk provisioning that the RBI needs to maintain, and to determine whether it is holding provisions, reserves and buffers in surplus or deficit of the required level.

4. To propose a suitable profit distribution policy taking into account all the likely situations of the RBI, including holding more provisions than required and the RBI holding less provisions than required.


Footnotes:

1. After the government started pushing the central bank to review its economic capital framework, the RBI board, at its meeting in November 19, decided to review the issue.

2. Dr Jalan was the Governor of the RBI between November 1997 and September 2003.

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