RBI Syncs Financial Year with the Fiscal Year
On February 15, 2020, the board of Reserve Bank of India (RBI) decided to sync the Financial year of the bank with the Fiscal Year. The Fiscal Year begins in April and ends in March and the Financial year is between July and June
The Central Board of Directors of RBI at the 582nd meeting recommended aligning of Fiscal and financial years. The alignment would change 8-decade practice of RBI.
The alignment was recommended by an expert committee led by Bimal Jalan. According to the committee, the central bank will be able to provide estimates of the surplus transfers better after the alignment. This will reduce the interim dividend that the RBI has to pay to the Government. However, the interim dividend will be restricted to extraordinary circumstances. It will also bring in cohesiveness with the reports and policy projections made by the RBI.
Why the move?
The Centre had been demanding for an interim dividend (between April to August) as its final balance sheet is prepared in August. This was mainly because RBI had a different accounting year.
Category: Economy & Banking Current Affairs