RBI to pay record dividend of Rs 2.87- lakh crore to govt for FY26 amid West Asia crisis

New Delhi: The Reserve Bank of India (RBI) on Friday announced that it will transfer a record Rs 2.87 lakh crore to the central government as dividend for the financial year 2025-26.

The RBI’s Central Board of Directors chaired by Governor Sanjay Malhotra approved the dividend payment at its meeting held in Mumbai.

“The Central Board approved the transfer of surplus of Rs 2,86,588.46 crore to the Central Government for the accounting year 2025-26,” the RBI said in a statement.

This year’s dividend payment by the central bank is 6.7% higher than the previous year’s Rs 2.69 lakh crore. Last’s payout was 27% higher over the previous year.

The record dividend transfer from the RBI would provide the Centre with a fiscal cushion to address challenges arising from the ongoing West Asia crisis.

Surplus transfer by RBI is 90.8% of budgeted non-tax revenue under ‘dividend/surplus of Reserve Bank of India, nationalised banks & financial institutions’ head for the 2026-27 union budget,

“Higher transfer will reduce some pressure on the fiscal deficit due to the geopolitical situation,” said Devendra Kumar Pant, Chief Economist, India Ratings & Research.

In the Union Budget presented in February, Finance Minister Nirmala Sitharaman pegged the dividends and surpluses from the RBI, nationalised banks, and financial institutions in 2026-27 at Rs 3.16 lakh crore.

To meet the budget targets the government would be required to get around Rs 30,000 crore from state-run banks and financial institutions as dividend. Some analysts were expecting the RBI’s payout to be even higher.

“The RBI surplus transfer is marginally lower than expected, thereby limiting the levers for the government in terms of managing the fiscal slippage risks,” said Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank.

“While we do not see extra borrowing risks for now we continue to monitor the extent of subsidy and tax growth slowdown,” she added.

The RBI’s balance sheet rose to Rs 91.97 lakh crore as of March 31, 2026, an increase of 20.61% over the previous year.

Gross income of RBI increased by 26.42% in FY26 over the previous year to Rs 4.27 lakh crore while the expenditure before risk provisions increased by 27.6% to Rs 0.32 lakh crore.

Thus, net income, before risk provision and transfer to statutory funds, aggregated Rs 3.95 lakh crore in FY26 as against Rs 3.13 lakh crore in FY25.

The transferable surplus for any financial year is arrived at on the basis of the revised Economic Capital Framework (ECF) as approved by the Central Board of the RBI.

Pant said the transfer by the central bank to the government would have been around Rs 64,518 crore higher had RBI limited the contingency risk buffer (CRB) to the last year level.

The RBI has decided to transfer Rs 1.09 lakh crore towards the CRB for FY26, against the previous year’s Rs 44,861.70 crore.

“Transferring higher amounts to the CRB will help in RBI intervening in the financial market as per the evolving domestic and global macroeconomic conditions,” Pant said.