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The Reserve Bank of India (RBI) will transfer a record Rs 2.69 lakh crore as dividend to the central government for the financial year 2024–25, marking the highest-ever surplus payout by the central bank. The announcement was made following the 616th meeting of the RBI’s Central Board of Directors, chaired by Governor Sanjay Malhotra, on May 23.

This year’s dividend marks a substantial 27.4 per cent increase compared to the Rs 2.1 lakh crore transferred by the RBI to the central government in the financial year 2023–24. In the year prior, FY23, the central bank had transferred Rs 87,416 crore, highlighting the sharp and steady upward trend in surplus distribution over the past two years. The significant jump in the FY25 payout underscores the Reserve Bank’s improved financial performance and efficient management of its assets.

The decision on the dividend was based on the revised Economic Capital Framework (ECF), which was approved earlier this month. Under the updated norms, the Contingent Risk Buffer (CRB), a key risk provisioning mechanism, has been raised to 7.5 per cent of the RBI’s balance sheet, the upper limit of the prescribed range.

Fiscal Deficit Targets

The dividend will support the government in achieving its fiscal deficit target of 4.4 per cent for FY25. It will help offset lower-than-expected tax revenues due to subdued economic activity and provide room to manage potential revenue losses from import duty reductions, as India continues trade negotiations.

The RBI earns surplus income from interest on its investments, foreign exchange gains, and proceeds from currency printing. Full details on the source of this year’s record surplus will be shared in the RBI’s annual report, which is expected to be released soon.

The board also reviewed domestic and global economic trends and approved the RBI’s financial statements and annual report for FY25 during the meeting.