The Reserve Bank of India (RBI) made its much-awaited annual announcement of dividend payout to the central government – a whopping ₹2.69 lakh crore for FY2025. The RBI’s approval for the dividend is in tandem with research analysts’ expectations, marking an increase of 27.37 per cent from last year’s payout of ₹2.1 lakh crore.
At the 616th Meeting of Central Board held on Friday, the RBI officials reviewed the global and domestic economic scenario, including risks to the outlook and decided to transfer a surplus of ₹2,68,590.07 crore to the Centre.
The Union Budget for the current fiscal has projected a dividend income of ₹2.56 lakh crore from the RBI and public sector financial institutions.
Meanwhile, the Contingency Risk Buffer (CRB) has also been hiked to 7.50 per cent from the previous 6.5 per cent. The CRB, which has seen a constant increase over the years, helps cover potential risks like unexpected economic shocks, falling asset values, staff costs, and bad loans. Even during the years of the pandemic, the RBI had maintained CRB at 5.5 per cent. In FY2023, it was hiked to 6 per cent, and in FY2024, to 6.5 per cent.
Having earmarked ₹11.21 lakh crore for infra-led growth in the current fiscal year, the dividend transfer is expected to ease pressure on the exchequer and allow the Centre to focus on capital expenditure and sustain tax relief measures. It will also help the government reduce its fiscal deficit, which was 5.6 per cent in FY2024.
The amount transferred by the RBI each year to the central government from the surplus income generated through investments, higher dollar sales, foreign exchange gains, and revenue earned from currency printing fees, is determined as per recommendations of the Bimal-Jalan-headed Expert Committee which reviews Economic Capital Framework of the RBI.
A report by Front Wave Research, a SEBI-registered research analyst, had predicted last week that the RBI was expected to transfer a record surplus dividend of ₹2.7 lakh crore to ₹3 lakh crore to the government in the financial year 2026 which would help pump liquidity into the banking system. The liquidity is expected to be visible from July, say economists.
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