RBI to give record dividend of Rs 2.69 lakh crore to government
With an aim to help the exchequer to tide over challenges posed by US tariffs and increased spending on defence due to the conflict with Pakistan, the Reserve Bank of India (RBI) has announced a record Rs 2.69 lakh crore dividend to the government for FY25, 27.4 per cent higher than 2023-24. During fiscal 2023-24, the central bank had transferred Rs 2.1 lakh crore dividend to the government, meanwhile, for 2022-23 it was Rs 87,416 crore. RBI has said that the transferable surplus for the year (2024-25) 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.
RBI’s revised EFC stipulates that the risk provisioning under the Contingent Risk Buffer (CRB) be maintained within a range of 7.50 to 4.50 per cent of its balance sheet. The CRB was increased to 6 per cent for FY2022-23 and to 6.50 per cent for FY 2023-24. RBI said that based on the revised ECF, and taking into consideration the macroeconomic assessment, the Central Board decided to further increase the CRB to 7.50 per cent. Further, giving details about the revised ECF, the RBI added that the computation of market risk buffer requirement to adopt an integrated approach, wherein the off-balance sheet portfolio is also reckoned, together with the on-balance sheet portfolio. The computation of market risk buffer requirement may also include investments in Foreign Currency Assets in minor currencies.
Moreover, with respect to the surplus distribution policy, any available equity in excess of 7.5 per cent of balance sheet (B/S) size (after considering shortfall in market risk buffers, if any) may be written back from the Contingency Fund to income. Meanwhile, according to the revised ECF, in case, the available equity is below the lower bound of its requirement, no surplus will be transferred to the government till at least the minimum level of Required Realised Equity is achieved. The government aims to bring down the fiscal deficit during 2025-26 to 4.4 per cent of the GDP from 4.8 per cent estimated for the preceding fiscal.
