Is Reserve Bank of India hoarding too much capital?4 min read . Updated: 15 Nov 2018, 09:08 AM IST
The increase in RBI's capital base is largely driven by the increased accumulation of forex reserves in the post-crisis era
Central banking works best when it is boring. So, it is surprising that the very technical issue of whether the Reserve Bank of India (RBI) holds too much capital in its balance sheet has become the vortex of an unexpectedly heated public debate. The government reportedly wants RBI to return some of its capital to its owner. RBI is pushing back. The battle lines have been drawn. The adequate level of central bank capital is expected to be one of the key issues to be discussed when the RBI board meets once again next week.
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