Reserve Bank of India revises its financial year; to follow Government’s April-March calendar year
The decision was taken during the RBI’s central board of directors’ meeting
The Reserve Bank of India has decided to revise its financial year and align it with government’s practice. The decision was taken during the RBI’s central board of directors’ meeting. As per the decision, the fiscal year 2021-22 for the central bank will now begin from April 1.
However, fiscal year 2019-20 will end on June 30, 2020 whereas the fiscal year 2020-21 will begin on July 1, 2020 but will end on March 31, 2021. Post this, all the accounting year will commence on April 1 every year.The central bank has been following July-June as its accounting year for the past eight decades.
So far, both the RBI and the Government follow the T plus one system. According to this system, the financial year spreads over two successive years. However there is one significant difference. The Government’s fiscal year 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 of accounting year with the Government will also change the way the RBI does book keeping. Also, it may not require them to announce the interim dividend. The RBI, which currently follows July-June calendar, usually transfers dividend after closing its accounts in August.