RBI may soon sync its Accounting year with government’s fiscal year

On Saturday, Reserve Bank of India governor Shaktikanta Das gave a hint that the central board of RBI may decide to sync the RBI’s accounting year with the fiscal year of the government.

“We are examining that. It is under consideration. You will very shortly hear on that from RBI,” Das told reporters after a customary post-Budget interaction with finance minister Nirmala Sitharaman and other finance ministry officials.

Currently, the RBI’s accounting year is from July to June, however, the government has April-March fiscal year.

The Bimal Jalan panel which has been set up to review the economic capital framework of RBI had recommended both accounting years should be in sync in 2020-21. “The RBI would be able to provide better estimates of the projected surplus transfers to the government for the financial year for budgeting purposes,” the Jalan panel had said.

The panel had also said that the syncing accounting years can reduce the need for the payout of an interim dividend by the RBI. “The payment of an interim dividend may then be restricted to extraordinary circumstances,” it had said.

Replying to a question on interim dividend, Das said if a decision is taken on the matter, it will be uploaded on the RBI website as part of the minutes. “On interim dividend, there has been a lot of speculation outside. As and when it comes up for discussion in the RBI board, you will automatically come to know,” he said.

On reports of a delay in the merger of 10 public sector banks announced on 30 August, Sitharaman said, “I don’t see any reason to hold back or any reason particularly causing the delay for any notification to come. You will hear it as and when a decision is taken.”

The governor said he does see any inflationary impact of the Budget FY21. “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 numbers for the current year and next year are very much within the parameters of the FRBM committee recommendation. Good part of the government borrowings is budgeted to come from small savings. So I don’t see much of inflation impact,” he said.

Das said declining crude oil prices will have a positive impact on inflation. “The main spike is coming from food inflation, that is vegetables and protein items. Core inflation has slightly edged up because of revision of telecom tariffs,” he added.