Concerns over Fiscalisation of the Reserve Bank of India

Recently, the Reserve Bank of India approved a record surplus transfer of Rs. 2.87 lakh crore to the Union Government for FY 2025–26, surpassing the previous record of Rs. 2.11 lakh crore. The transfer is in line with the Economic Capital Framework (ECF) adopted following the recommendations of the Bimal Jalan Committee.

How Does RBI Earn Profits?

Major Sources of Income

  • Interest on Government Securities: Earnings from government bonds held by RBI.
  • Lending Operations: Income generated through repo and other liquidity operations with banks.
  • Foreign Exchange Operations: Profits from buying, selling and managing foreign exchange reserves.
  • Seigniorage: Revenue earned ....
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