LATEST DECISION OF RBI OVER DIVIDEND

 In August 2020, RBI held its 548th Annual Meeting where Mr. Shaktikantha Das, governor of RBI, made a decision over video conferencing with the board members where it was approved for a sum of dividends for the country in the year 2020-2021. In the financial year budget, it was decided earlier that the RBI was going to lend Rs. 60,000 crores and after the meet was concluded, the news came out that the Central Board of RBI approved a dividend of Rs 57,128 crores to the Central Government. Even though the Indian economy has gone extremely dull in the times of COVID-19, RBI still agreed to risk it and lend the loan amount for the government for the welfare of the country. This year, RBI has pegged for 3.8 percent of deficit in the country whereas last year it was 3.3 percent, they have increased it graciously this year viewing the situation going on in the country.

This decision was taken by the Board of RBI on 14th August 2020. The Board has decided to maintain the Contingency Risk Buffer at 5.5%. This decision was taken by the Central Board of RBI after reviewing the present circumstances of the Indian economy due to the ongoing pandemic of COVID-19. There are a lot of regulatory measures taken by the Reserve Bank of India to mitigate the economic impact of the COVID-19 pandemic. Further, it was also discussed by the board to set up an Innovation Hub. Additionally, the government has also increased its borrowing of gross borrows for the fiscal year, where it was supposedly budgeted to Rs. 7.8 trillion to Rs. 12 trillion which indicated a huge slippage in the fiscal deficit but it was necessary after the situation of COVID-19 pandemic was mitigated after an intense review of the current economic situation in and around the country.