Current Affairs: Passage of the Day - 23 May 2024 | Current Affairs: Daily, Weekly & Monthly - CLAT PDF Download

Directions: Read the passage carefully and answer the questions that follow.

The Reserve Bank of India (RBI) Wednesday declared a record dividend of Rs 2.11 lakh crore to govt, more than double what was expected by the money markets.
The dividend is more than the Rs 1.02 lakh crore that govt had budgeted as dividends from all financial institutions and will reduce its need to borrow from the market. This is the second year in a row that the central bank has paid a dividend sharply higher than the amount budgeted by govt.
The likelihood of a lower govt borrowing pushed down yields on the 10-year govt bonds to below 7%.
Experts said the surplus transfer to govt will help it reduce the fiscal deficit and make funds available for capital spending. The announcement will make available a bonanza for the new govt when it takes office after the LS polls.
In a statement issued after its board meeting, RBI said the dividend was computed after maintaining a contingent risk buffer at 6.5% of its balance sheet. The buffer is at the higher end of the 6.5 to 5.5% band recommended by the Bimal Jalan committee, which indicates that RBI’s payout follows record earnings.
RBI’s total income and sources of income are disclosed in the annual report which is published later in the year. Considering that public sector banks too have reported record profits and are declaring dividend, govt revenues are likely to overshoot budgeted numbers.
RBI approves Rs 2.11 lakh crore dividend payout to govt for 2023-24
The Reserve Bank of India approved a Rs 2.11 lakh crore dividend payout to the central government for 2023-24, doubling the previous year's amount under Governor Shaktikanta Das's chairmanship.
RBI approves record Rs 2.1L cr dividend to govt
The RBI's dividend of Rs 2.1 lakh crore surpassed market expectations, reducing the government's need to borrow. This surplus transfer will help lower the fiscal deficit and increase funds for capital expenditure.
Boost for Centres finances! RBI may transfer higher dividend of around Rs 1 lakh crore
Kanika Pasricha from Union Bank of India predicts a surplus transfer of INR 1,000 billion from the RBI to the government in FY25. Analysts suggest a potential surplus exceeding last year's Rs 87,416 crore transfer.
[Excerpt from The Times of India “RBI Approves Highest-Ever Dividend Of Rs 2.11 Lakh Crore for Government” Dated 23/05/24]

Q1: How much surplus payment has the Reserve Bank of India (RBI) approved to the Central Government for the accounting year 2023-24?
(a) Rs 87,416 crore
(b) Rs 1 lakh crore
(c) Rs 2.11 lakh crore
(d) Rs 30,307 crore

  View Answer

Q2: What was the surplus transfer to the Central Government by the RBI in the year 2022-23?
(a) Rs 2.11 lakh crore
(b) Rs 1 lakh crore
(c) Rs 30,307 crore
(d) Rs 87,416 crore

  View Answer

Q3: By how much could the fiscal deficit for FY 2025 be reduced due to the increased surplus transfer?
(a) 0.1% of GDP
(b) 0.2% of GDP
(c) 0.3% of GDP
(d) 0.5% of GDP

  View Answer

Q4: What are some factors contributing to the increase in the RBI’s surplus?
(a) Decrease in VRR sales participation
(b) Higher interest rates on domestic and foreign securities
(c) Lower interest rates on domestic securities
(d) Reduction in foreign exchange fund revaluation gains

  View Answer

Q5: What recommendation does the Bimal Jalan Committee provide regarding the RBI’s surplus transfer?
(a) Increasing the fiscal deficit
(b) Lowering the surplus transfer to the government
(c) Balancing the RBI’s financial resilience with the fiscal needs of the government
(d) Promoting fixed repo rate auctions

  View Answer