Reserve Bank of India re-draws its financial year

Fiscal 2019-20 will end on June 30, 2020 while fiscal year 2020-21 will begin on July 1, 2020 but ends on March 31, 2021

The Reserve Bank of India (RBI) has decided to align its financial year with the Government.

The central board of the RBI, in its meeting in New Delhi on Saturday, decided that the fiscal year 2021-22 for the central bank will begin from April 1. Fiscal 2019-20 will end on June 30, 2020 while fiscal year 2020-21 will begin on July 1, 2020 but ends on March 31, 2021. Thereafter, all fiscal year will start on April 01 every year.

As of now, both - the RBI and the Government - follow the 'T plus one' system. This means the financial year spreads over two successive years. But still, there is one fundamental difference. The fiscal year for the Government starts on April 1 in 'T' (first year) and ends on March 31 in 'T+1' (second year). The fiscal year for the RBI, however, begins on July 1 in the first year and ends on June 30 in the next year.

The alignment with the Government will change the way the RBI does book keeping. Also, it may not require them to announce the interim dividend.

Source : The Hindu

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