What does PRMF mean in FUNDS
The Public Reserve Management Fund (PRMF) is a government fund that has been established for the purpose of protecting and managing public sector reserves. It is managed and governed in accordance with the Public Sector Reserves Act 2008 and its regulations. The objective of the Fund is to ensure stability in the management of public sector reserves and to provide for their timely, effective and responsible utilization, both in response to current needs as well as investments for future generations. The operation of the Fund is subject to independent oversight by an appointed Board of Directors who are each appointed by Central Government on a renewable three-year term.
PRMF meaning in Funds in Business
PRMF mostly used in an acronym Funds in Category Business that means Public Reserve Management Fund
Shorthand: PRMF,
Full Form: Public Reserve Management Fund
For more information of "Public Reserve Management Fund", see the section below.
What does PRMF mean?
The acronym PRMF stands for "Public Reserve Management Fund". This fund provides financial stability for both current needs and investments necessary for generations to come. Its primary purpose is to protect and manage public sector resources such as land, funds, or assets transferred from other government departments or organizations. It also serves as a means to effectively utilize public reserve resources in an orderly manner, with special consideration given towards potentially long-term objectives.
How does PRMF work?
PRMF works mainly through an appointed Board of Directors whose members are chosen from Central Government on a renewable three year term basis. This Board oversees all operations related to the fund ensuring that investments made into it are compliant with legal requirements set forth in the Public Sector Reserves Act 2008 and other applicable regulations. Additionally, they are tasked with responsibly utilizing any public reserve resources available under their mandate either currently or over a more extended period of time.
Essential Questions and Answers on Public Reserve Management Fund in "BUSINESS»FUNDS"
What is the Public Reserve Management Fund?
The Public Reserve Management Fund (PRMF) is a special fund established for the purpose of providing additional funds to State Governments and Union Territories for meeting their future commitments in respect of regular public services as well as any extraordinary contingencies. It acts as a safety net for State treasuries, allowing them to access funds from the Central Government in times of heightened fiscal stress or during emergency situations.
How much capital does the Public Reserve Management Fund have?
The corpus of the PRMF is limited to 30% of gross tax revenue collections of the government of India on an annual basis. As per revised estimates 2020-21, this amounted to Rs 4,13,142 crores (approximately 413 billion).
Who manages the fund?
The PRMF is managed by a six-member committee called the Reserve Bank Board, headed by the Governor of the Reserve Bank of India. This committee also includes four members nominated by the Government of India and one member nominated by the Ministry of Home Affairs.
Is there interest attached to amount deposited into this fund?
Yes, all deposits made into this fund are subject to interest rates set by RBI from time to time. Currently, interest rates are 3.50% per annum compounded annually.
Are withdrawals allowed from the Public Reserve Management Fund?
Yes, withdrawals from this fund can be made when needed but these withdrawals must be approved by both Houses of Parliament unless it is used for extraordinary circumstances like natural calamities or emergency needs determined by Government.
What happens if there are insufficient funds in this account?
In case there are insufficient funds in this account due to higher than expected demand or due to any other reason determined by Government then either more money can be transferred into this account or additional borrowing can be done through market borrowings so that state governments’ requirements can be met without any disruption.
Does every state bank recieve an equal amounts from PRMF?
No, each state receives different amounts based on their population and development levels. These amounts are reviewed periodically and adjusted accordingly.
How quickly will States receive money when they need it?
Depending on whether it is an urgent request with prior approval from Parliament or if it’s an extraordinary circumstance requiring urgency, states should expect anywhere between 1-4 weeks before they received required funds if their application meets all necessary criteria and gets promptly approved.
Is there any limit on how much states can withdraw from PRMF at once?
Yes , states are restricted in terms of how much they can borrow/withdraw at once with a maximum limit being 40% of Gross State Domestic Product(GSDP).
Final Words:
The Public Reserve Management Fund (PRMF) can be seen as a very effective way to ensure that investment decisions made today consider both short-term impacts as well as implications associated with longer-term objectives. With its ability to rapidly respond to changing demands, this fund proves itself capable of meeting various economic needs while still being able to maintain financial stability within the public sector reserves. Through proper oversight provided by its Board of Directors; efficient use of these resources can be achieved without compromising future prospects.
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