1
Question
Consider the following statements regarding Economic Capital Framework (ECF):
Which of the following statements is/are correct?
Consider the following statements regarding Economic Capital Framework (ECF):
Which of the following statements is/are correct?Open in App
Solution
The correct option is C Both 1 and 2
The Reserve Bank of India (RBI), in consultation with the central government, had constituted a Committee (Chairman: Dr. Bimal Jalan) to review the current economic capital framework, in November 2018.
The existing economic capital framework was developed in 2014-15, and was operationalised in 2015-16. The economic capital framework provides a methodology for determining the appropriate level of risk provisions and profit distribution to be made under Section 47 of the RBI Act, 1934.
As per this provision, the central bank is required to pay balance of its profits to the central government after making provision for bad and doubtful debts, depreciation in assets, and contributions to staff.
The Reserve Bank of India (RBI), in consultation with the central government, had constituted a Committee (Chairman: Dr. Bimal Jalan) to review the current economic capital framework, in November 2018.
The existing economic capital framework was developed in 2014-15, and was operationalised in 2015-16. The economic capital framework provides a methodology for determining the appropriate level of risk provisions and profit distribution to be made under Section 47 of the RBI Act, 1934.
As per this provision, the central bank is required to pay balance of its profits to the central government after making provision for bad and doubtful debts, depreciation in assets, and contributions to staff.
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