The Bimal Jalan Committee, which is looking into the size of the reserve India’s central bank should hold, has suggested transfer of a portion of Reserve Bank of India’s reserves to the government in tranches over three to five years.

“The report has proposed a formula for a nominal transfer of a portion of the RBI’s reserves to the central government in a period of 3-5 years. This is in line with the current practice being followed by the RBI for transferring dividend annually,” Business Standard reported, quoting an unnamed source.

The committee will submit its report within 15 days to RBI Governor Shaktikanta Das. Based on the recommendations, the central bank will decide what share of its reserve will be transferred to the government. The other key members of the committee include former RBI deputy governor Rakesh Mohan, Finance Secretary Subhash Chandra Garg, RBI deputy governor N.S. Vishwanathan, and two RBI central board members, Bharat Doshi and Sudhir Mankad.

The Bimal Jalan report would likely include a dissent note by the finance secretary, who is the government’s representative on the panel. While other members of the committee favored a phased transfer of the central bank’s capital reserves, the government’s view, voiced by Garg, was for a one-time transfer.

The central bank and the government have been on collision course over sharing of former’s surplus funds. Last year matters came to a head when the finance ministry sought around 3 trillion rupees (US$ 43.58 billion) from the RBI’s reserve funds.

It ultimately led to the resignation of the then RBI governor, Urjit Patel. Patel and his deputy, Viral Acharya, who resigned recently, had contended that the government was tampering with the autonomy of the central bank. Acharya even made this public while speaking at a function in Mumbai, last October.

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The central bank maintains various types of reserves to cover various risks including market risk, operational risk, credit risk and contingency risk. According to RBI’s 2017-18 annual report, it had 9.63 trillion rupees ($139 billion) as a reserve, representing 27% of the total assets. The Finance Ministry contends that the global norm is to maintain reserves of 14% of total assets and that excess funds should be transferred to the government

After Patel’s resignation the central bank in December formed a six-member committee, headed by Jalan and co-chaired by Mohan, to review the bank’s economic capital framework.

The government has set its eyes on surplus capital transfer from the central bank to help meet its fiscal deficit target. It has set a target of 3.3% of the gross domestic product (GDP) for the current fiscal year, revised downward from 3.4% pegged in the interim Budget in February. But the current slowdown in various sectors of the economy and tepid growth in tax collections will make the target daunting.

Besides surplus capital transfer, the government is expecting a dividend of 900 billion rupees from the central bank in the current financial year, as against 680 billion rupees received last fiscal year.