alexa

Search in Indianmoney's WealthPedia

Home Articles RBI to Sync Its Accounting Year With Govt's Fiscal Year From 2020-21

RBI to Sync Its Accounting Year With Govt's Fiscal Year From 2020-21

IndianMoney.com Research Team | Posted On Tuesday, March 10,2020, 05:35 PM

3.0 / 5 based on 3 User Reviews

RBI to Sync Its Accounting Year With Govt's Fiscal Year From 2020-21

 

 

The governor of the Reserve Bank stated that the RBI may soon align its accounting year with the government’s fiscal year. The move may come into effect from the financial year of 2020-21. With such an announcement, the practice of the exchequer getting an interim dividend from the central banks may also come to an end.

Want to know more on Investment Planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

RBI to Sync Its Accounting Year With Govt's Fiscal Year From 2020-21

The governor of the RBI, Shantiniketan Das hinted this after the meeting of the RBI’s central board held in the national capital. The RBI said in a statement “The board recommended aligning the financial year of the RBI, currently July to June, with the government’s financial year (April-March) from the year 2020-21 and approved forwarding a proposal to the government for its considerations.”

The practise has been prevalent in the central bank for eight decades. But the centre had started demanding interim dividend from RBI till the time the final balance sheet was prepared in August. To address the problem, the Bimal Jalan Panel-led committee has recommended the RBI to align both the accounting years at the beginning of 2020-21. Thus with the alignment of the accounting year with the government’s fiscal year, the RBI can control and reduce the payout of interim dividends which will then be restricted to extraordinary circumstances.

As per the sources, the government has proposed the payment of Rs. 37,000 Crore of interim dividend payment for the Year 2019-20. The proposal is on the table and the decision is likely to be taken in the next board meeting. For the FY19, the RBI has paid Rs. 28,000 of interim dividend to the central government.

See Also: Best Investment Plans for Millennials in 2020

Credit Flow of the Economy:

The RBI’s governor stated on Saturday that the credit flow in the economy is gaining momentum and it is likely to regain its speed in the coming months. The RBI governor said that the credit flow of the commercial banks stands at Rs. 2.7 trillion as estimated within October 2019 to January 2020. The figure shows a favourable change from the credit flow estimated in the previous quarter of April to September 2019 which stood at Rs. 1.3 trillion.

Thus the figure shows a positive pace from October onwards. Das said, “The momentum is gathering pace. It has really picked up from October onwards and now the flow of credit from all sources i.e. banks, domestic market and external borrowings has improved to about Rs. 7.5 trillion and there is a flow of around Rs. 6 trillion between October to January. The momentum is gathering pace and credit flow is reviving.”

See Also: 7 Steps for Financial Planning for Young Adults

The Inflationary Impact of Budget:

The governor of RBI also briefed the media about the inflationary effect of the budget FY21 and said that he did see any inflationary impact in March. He said “Direct inflationary impact of any budget is the fiscal deficit number, if borrowing goes up. The government has adhered to the principle of fiscal prudence. The deficit number for the current year and the next year are very much within the parameters of the FRBM committee recommendation. Good part of the government borrowing is budgeted to come from small savings. So I don’t see much of inflation impact”. He further added that the decline in crude oil prices will also help in containing inflation. He believes that the main is coming from the food items that include vegetables and protein items. Also, the inflation has slightly spiked up due to the revision of the telecom tariffs.

See Also: Basics of Financial Planning

On Rate Cuts:

While addressing the transmission of rate cuts, Das said that it is steadily improving and will further improve in the coming months. He said, “transmission to fresh rupee has increased to 49 bps in December MPC meet to 69 bps in February MPC meet. It’s a consequence of the rate cuts, surplus liquidity which we have ensured in the system and external benchmarking which was brought into operation from 1ST October onwards”.

You May Also Watch

Iframe Content

Keep your Financial Cognizance up to date with IndianMoney App. Download NOW for simple tips & solutions for your financial wellbeing.

Have a complaint against any company? IndianMoney.com's complaint portal Iamcheated.com can help you resolve the issue. Just visit IamCheated.com and lodge your complaint. If you want to post a review on any company you can post it on Indianmoney.com review and complaint portal IamCheated.com.

Be Wise, Get Rich.

What is your Credit Score? Get FREE Credit Score in 1 Minute!

Get Start Now!
CIBIL Meter
Get It now!
Attention!

This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.