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Consider the following statements regarding the Reserve Bank of India’s (RBI) Economic Capital Framework?
It is used to inform the risk provisioning and surplus distribution decisions for the central bank.
  • The Bimal Jalan committee was constituted to review the current framework.
  • The Committee recommended to align the central bank’s accounting year with the financial year.
    Which of the statements given above is/are correct?
    • a)
      2 only
    • b)
      1 and 3 only
    • c)
      1 and 2 only
    • d)
      1, 2 and 3
    Correct answer is option 'D'. Can you explain this answer?
    Most Upvoted Answer
    Consider the following statements regarding the Reserve Bank of India...
    Statement 1 is correct: The economic capital framework of the Reserve Bank of India provides a methodology for determining the appropriate level of risk provisions and surplus/profit distribution to be made under Section 47 of the RBI Act, 1934. As per this provision, the central bank is required to pay balance of its profits to the central government after making provision for bad and doubtful debts, depreciation in assets, and contributions to staff.
    Statement 2 is correct: RBI had constituted a Committee under the Chairmanship of Dr. Bimal Jalan to review the current economic capital framework, in November 2018. The existing economic capital framework was developed in 2014-15, and was operationalised in 2015-16.
    Statement 3 is correct: The committee submitted its report in August 2019 with the following key recommendations:
    • Align the central bank’s accounting year with the financial year which could reduce the need for paying interim dividend.
    • A clearer distinction between the two components of economic capital — realised equity and revaluation balances.
    • Review of RBI’s economic capital framework every five years.
    • Maintain Contingency Risk Buffer (CRB)between 5.5% to 6.5% of the RBI’s balance sheet.
    • Minimum level of realised equity to be maintained should be the sum of the monetary and financial stability risks, credit risk and operational risk.
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    Consider the following statements regarding the Reserve Bank of India’s (RBI) Economic Capital Framework? It is used to inform the risk provisioning and surplus distribution decisions for the central bank. The Bimal Jalan committee was constituted to review the current framework. The Committee recommended to align the central bank’s accounting year with the financial year. Which of the statements given above is/are correct?a)2 onlyb)1 and 3 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?
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    Consider the following statements regarding the Reserve Bank of India’s (RBI) Economic Capital Framework? It is used to inform the risk provisioning and surplus distribution decisions for the central bank. The Bimal Jalan committee was constituted to review the current framework. The Committee recommended to align the central bank’s accounting year with the financial year. Which of the statements given above is/are correct?a)2 onlyb)1 and 3 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding the Reserve Bank of India’s (RBI) Economic Capital Framework? It is used to inform the risk provisioning and surplus distribution decisions for the central bank. The Bimal Jalan committee was constituted to review the current framework. The Committee recommended to align the central bank’s accounting year with the financial year. Which of the statements given above is/are correct?a)2 onlyb)1 and 3 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding the Reserve Bank of India’s (RBI) Economic Capital Framework? It is used to inform the risk provisioning and surplus distribution decisions for the central bank. The Bimal Jalan committee was constituted to review the current framework. The Committee recommended to align the central bank’s accounting year with the financial year. Which of the statements given above is/are correct?a)2 onlyb)1 and 3 onlyc)1 and 2 onlyd)1, 2 and 3Correct answer is option 'D'. Can you explain this answer?.
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