RBI logo.
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New Delhi: The Reserve Bank of India (RBI) on Friday announced that it will pay Rs 2.69 lakh crore as dividend to the central government for the accounting year 2024-25, a move that would serve as a buffer to any shortfall tax collections and help lower the fiscal deficit.
This will be the highest-ever surplus money paid by the RBI to the government. The money is also substantially higher than the budgetary estimates.
The Central Board of Directors of the RBI chaired by Governor Sanjay Malhotra approved the transfer of Rs 2,68,590.07 crore as surplus to the central government, the RBI said in a statement.
This amount is 27 per cent higher when compared with the previous year’s transfer of Rs 2.1 lakh crore. In the Union Budget 2025-26, Finance Minister Nirmala Sitharaman has pegged the receipts from the RBI and the public sector financial institutions at Rs 2.56 lakh crore.
“With this increase, we believe there could be an additional Rs 50,000 crore to Rs 60,000 crore that will be available assuming that banks' dividend could be lower in a declining interest rate era,” said Madan Sabnavis, Chief Economist at Bank of Baroda.
Sabnavis said the additional money from the RBI could serve as a buffer against any shortfall in tax revenue due to lowering of tariff or lower nominal GDP growth. This could also be used to fund any additional expenditure on defence replenishment or further strengthening this segment.
The government may also use the money to cut the fiscal deficit. “We expect the fiscal deficit to ease by 20 basis points from the budgeted level to 4.2 per cent of GDP. Alternatively, it will open up for additional spending for around Rs 70,000 crore, other things remaining unchanged,” Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India.
According to a statement issued by the RBI, the transferable surplus for the year has been arrived at on the basis of the revised Economic Capital Framework (ECF) as approved by the Central Board in its meeting held on May 15, 2025.
The Board had decided to maintain the Contingent Risk Buffer (CRB) at 5.50 per cent of the central bank’s balance sheet size to support growth and overall economic activity.
The dynamics of surplus for RBI was decided by its liquidity adjustment facility (LAF) operations and interest income from its holding of domestic and foreign securities.
Robust gross dollar sales, higher foreign exchange gains, and steady increases in interest income, boosted the RBI’s earnings during the fiscal 2024-25. In January, the RBI was the top seller of foreign exchange reserves among the Asian central banks.
In September 2024, India’s foreign exchange reserves had peaked to $704 billion. In the recent months the RBI has sold a substantial amount of dollars to stabilize the Indian rupee.