MUMBAI: Former RBI governor Bimal Jalan will chair a panel, which will decide on the ideal level of reserves for the central bank and how much can be transferred to the government. On Wednesday, RBI said the decision to appoint Jalan, who headed the central bank during the former NDA regime, was taken in consultation with the government.The panel is expected to submit its report by March-end. This means a decision can be expected after the vote-on-account in February and before next general elections.Jalan, who headed RBI during the tumultuous days after Pokhran II nuclear tests and subsequent US sanctions, has a reputation of being a pragmatic central banker. It was during his term that the Resurgent India Bond was floated to boost forex reserves. His term was marked with diplomacy when differences with the government were never allowed to boil over and come out in public. He was subsequently nominated as a Rajya Sabha member. Rakesh Mohan, a member in the committee, was Jalan’s deputy in 2002 and has worked closely with the government. Mohan holds conservative views with respect to reserves.RBI said the committee will review the existing Economic Capital Framework (ECF), keeping in mind the need to maintain adequate reserves and RBI’s public policy mandate of maintaining financial stability. Review of ECF was one of the sore points that led to friction between RBI and the government, which ultimately resulted in former governor Urjit Patel putting in his papers. Patel had held that RBI needs to maintain close to 99% of current reserves to retain its rating so that it can borrow during an emergency.While many reports have estimated RBI’s surplus capital at Rs 3.5 lakh crore, FM Arun Jaitley has repeatedly said the government was not eyeing RBI’s reserves to meet fiscal deficit.According to economists, the panel is likely to focus only on the realised gains, which are contingency reserves. Tapping into the gold and the foreign currency reserves would require sale of assets and would have other implications in liquidity management.While Patel had agreed to appoint a panel to review ECF in a board meeting on November 19, he stepped down on December 11, three days ahead of a board meeting, when the panel was expected to be named.