Question

Q. With respect to the Bimal Jalan Committee on External Capital Framework (ECF) consider the following statements:

Which of the above given statements are correct?

• A.
  1 and 2 only
• B.
  2 and 3 only
• C.
  1 and 3 only
• D.
  1, 2 and 3

Answer 1

The correct option is D

1, 2 and 3
Explanation:

Bimal Jalan committee was set up to recommend the appropriate Economic Capital Framework for the Reserve Bank of India (RBI). It has recommended the transfer of excess capital from the central bank to the government.

Statement 1 is correct: The committee recommended that there should be harmony between the interests of the government and the RBI on the design of the ECF.

Statement 2 is correct: It holds the view that the RBI's accounting year of July-June can be brought in alignment with the fiscal year of April-March from the financial year 2020-21. As this will bring more cohesiveness in the monetary policy projections and reports of the RBI.

Statement 3 is correct: It recommended that the RBI’s economic capital framework may be periodically reviewed after every five years. But it can be reviewed earlier as well if the situation demands so.