RBI Changing Financial Year: The Actual Story

This is with reference to the news reports that are stating that 'RBI is Changing Financial Year and New Financial Year to Begin on 1 July'

The Media reports are misinterpreting to the public that the financial year of India (that for general public, businesses, etc.) However, that is not the case. Below is an explanation in simple language.

1. RBI's financial year has always been July to June. 

1A. So the financial year of RBI always ended on 30 June and always started on 1 July. There is nothing new in this.

2. Early this year, RBI decided to align its financial year to the financial year of the Government. 

3. So in Feb 2020, the RBI board approved this change, whereby its current financial will end as usual, on 30 June 2020. 

4. Its next financial year will start on 1 July 2020, and end in nine months, on 31 March 2021.

5. RBI's decision had nothing to do with Corona, as is being suggested by the media.

6. RBI's decision impacts only its own book-keeping and dividend distribution. 

7. RBI's decision does not change the financial year for other companies and individuals, as is being misinterpreted in the media. 

7A. In fact, RBI has absolutely no power to do that.

8. Any change in the financial year for companies and individuals has to be issued by the Government of India under the Finance Act.

Omkar Sapre

[email protected]