RBI to pay record Rs 2.69 lakh-crore dividend to govt

New Delhi: The Reserve Bank of India will pay Rs 2.69 lakh crore—the highest-ever surplus—as dividend to the central government for fiscal 2025, the central bank said in a statement on Friday.

This compares with Rs 2.1 lakh crore and Rs 87,420 crore transferred to the government in the financial year-ended March 2024 and 2023 respectively. Economists had pegged the surplus transfer to the government in the range of Rs 2.5-3.5 lakh crore for the fiscal.

The RBI board also revised the Economic Capital Framework. The revised framework stipulates the risk provisioning under the Contingent Risk Buffer be maintained within a range of "6.0 ± 1.5% of the balance sheet size as against the existing level of 6.5%, with a lower bound of 5.5%".

The surplus transfer this year is likely a function of higher forex sales by the RBI, higher earnings on forex assets, and higher earnings on VRR operations as this was a deficit year, Madan Sabnavis, chief economist at the Bank of Baroda said.

The government targeted Rs 2.56 lakh crore this year from RBI plus PSBs and other government FIs.

"With this increase, we believe there could be an additional Rs 50-60,000 crore that will be available assuming that banks' dividend could be lower in a declining interest rate era," said Sabnavis. Still, he does not expect any substantial impact on the government’s fiscal deficit. "At best there could be a benefit of around 0.1% in deficit which can improve from 4.4% to 4.3%," he said.