Government banks also benefit - let's know!!!
Recently there was news of the profit of public sector banks also, but that news is different. This dividend is only of the Reserve bank, which RBI earns through loans to other banks as well as investments and other services. This is a part of that earning. Along with other banks, PSUs also pay dividends on their earnings to the government. Along with public sector banks, other banks have also earned good profits this time.
The public sector has made a profit of Rs 1.4 lakh crore and from this profit also the government will get money in the form of dividends. This year's dividend is 141 percent more than the last financial year's dividend. This dividend will act as support for the government. This dividend will reduce the fiscal deficit arising from the difference between the government's earnings and expenditures. The government will have the confidence of good economic conditions and will be able to spend freely on everything from infrastructure to public welfare schemes.
Due to these strong earnings, the Reserve bank has also got an opportunity to increase its CRB (Contingent Risk Buffer) and it can increase it from 6 percent to 6.5 percent. The Reserve bank has to keep reserves in the form of gold and cash. Similarly, other banks have to keep some part of their total business in reserve. The amount of this share is decided by the Reserve bank itself. The Reserve bank changes this rate from time to time, for example, retail inflation is coming close to the rate of 4 to 4.5, in such a situation the repo rate can be reduced in the committee meeting held every two months. By reducing the repo rate, it will be easier for people to take loans from the bank. Because EMI will reduce. RBI increases and decreases the reserves keeping in mind the situation.
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