Stealing from RBI won't work: Rahul Gandhi brutally takes down PM Modi on reserve borrowing

Former Congress president and present Wayanad MP Rahul Gandhi slammed the Narendra Modi government for borrowing money from the RBI reserve. “PM & FM are clueless about how to solve their self created economic disaster.  Stealing from RBI won’t work - it’s like stealing a Band-Aid from the dispensary & sticking it on a gunshot wound,” Gandhi said on Twitter. He used the ‘#RBILooted’ to highlight his point. Gandhi’s scathing attack came a day after The Reserve Bank of India (RBI) on Monday decided to transfer Rs 1.76 lakh crore in dividend and surplus reserve to the government. The decision was taken after the RBI board accepted the recommendation of a high-level panel headed by its former Governor Bimal Jalan on transfer of excess reserves to the government.

The board of central bank decided to transfer a sum of Rs 1,76,051 crore to the Government of India comprising Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore of excess provisions identified as per the revised Economic Capital Framework (ECF), the RBI said in a statement.

The committee has since submitted its report to the RBI Governor. The committee's recommendations were based on the consideration of the role of central banks' financial resilience, cross-country practices, statutory provisions and the impact of the RBI's public policy mandate and operating environment on its balance sheet and the risks involved.

The committee's recommendations were guided by the fact that the RBI forms the primary bulwark for monetary, financial and external stability.

Hence, the resilience of the RBI needs to be commensurate with its public policy objectives and must be maintained above the level of peer central banks as would be expected of a central bank of one of the fastest growing large economies of the world.

The receipts from the RBI will give a fillip to the government's efforts to boost the economy from a five-year low. Finance Minister Nirmala Sitharaman had last week announced a slew of measures to prop up growth even as the government tried to stick to the target of keeping fiscal deficit at 3.3 per cent of the GDP. The additional cash will now give the Centre more headroom for stimulating the economy.