The ECF panel will meet again in July and will submit the report post Budget.
New Delhi: The Bimal Jalan committee, which is looking into the size of capital reserves that the RBI should hold, on Monday again deferred its report submission deadline till Budget next month.
The six-member panel, under former RBI governor Jalan, was appointed on December 26, 2018, to review the Economic Capital Framework (ECF) for the Reserve Bank after the Finance Ministry wanted the central bank to follow global best practices and transfer more surplus to the government.
The RBI has over Rs 9.6 lakh crore surplus capital with it.
Economic Affairs Secretary Subhash Chandra Garg did not attend Monday's meeting of the Jalan panel, an official said, adding that the committee would meet one more time before finalising the report.
"The ECF panel will meet again in July and will submit the report post Budget," the official said.
The ECF panel was mandated to submit its report to the RBI within 90 days of its first meeting which took place on January 8. Following this, the panel was given a three-month extension.
The other key members of the panel include Rakesh Mohan, former deputy governor of RBI as the vice-chairman, finance secretary Subhash Chandra Garg, RBI deputy governor N S Vishwanathan, and two RBI central board members -- Bharat Doshi and Sudhir Mankad.
The panel has been entrusted with the task of reviewing the best practices followed by central banks worldwide in making assessment and provisions for risks.
The government and the RBI during the tenure of previous governor Urjit Patel had been at loggerheads over the Rs 9.6 lakh crore surplus capital with the central bank.
The finance ministry was of the view that the buffer of 28 per cent of gross assets maintained by the central bank is well above the global norm of around 14 per cent. Following this, the RBI board in its meeting on November 19, 2018, decided to constitute a panel to examine Economic Capital Framework.
In the past, the issue of the ideal size of the RBI reserves was examined by three committees -- V Subrahmanyam in 1997, Usha Thorat in 2004 and YH Malegam in 2013.
While the Subrahmanyam panel recommended for building a 12 per cent contingency reserve, the Thorat panel suggested it should be maintained at a higher 18 per cent of the total assets of the central bank.
The RBI board did not accept the recommendation of the Thorat committee and decided to continue with the recommendation of the Subrahmanyam committee.
The Malegam panel said the RBI should transfer an adequate amount of its profit to the contingency reserves annually but did not ascribe any particular number.
According to a report by Bank of America Merrill Lynch, the Jalan committee is likely to identify an excess buffer of up to Rs 3 lakh crore. This includes the excess capital in contingency reserves and also revaluation of reserves.
Halving of the contingency reserves to a level of 3.25 per cent from the present 6.5 per cent will release Rs 1.282 lakh crore, the report said, pointing out that the level is still 50 per cent higher than what central banks in the BRICS (Brazil, Russia, India, China and South Africa) grouping have.